C&L

GENERATION CHANGE YET TO TAKE PL ACE IN LOGISTIC S SECTOR Volume III n No 5

JULY 2014 I `60

C A R G O

L O G I S T I C S

GREAT EXPECTATIONS The Cargo and Logistics sector has been demanding enhancement and improvement in infrastructure and now that the Union Budget has indicated the clear intent of the government, better times do not seem so far away SAUDIA CARGO SETS RECORDS

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MANAGING EDITOR’s NOTE

Build to prosper

I

t was Pope in his Essay on Man who wrote: “Hope springs eternal in the human breast.”

So it is with all of us. And this year’s Union and Railway Budgets do bring that spark of hope. Where there was nothing happening, today the intent is clear and there is realization that it is infrastructure and infrastructure alone that can revive the economy.

Cargo and logistics stakeholders have been crying themselves hoarse all these years about infrastructure – or rather the lack of it. In fact, everyone doing business in India or with India have been demanding better infrastructural facilities. One wonders why it has taken so long for politicians to wake up. I remember a cargo meet quite a few years ago in Bangkok. During the interview with the cargo chief of an international airline, I asked him the problems that his airline faced in India. “There are three things wrong with India,” the German gentleman said, and went on to list them on his fingers, “Infrastructure. Infrastructure. Infrastructure.”

Neglected – and often treated shabbily – for the last decade, infrastructure has suddenly become king. During the UPA regime, for example, the construction of the number of kilometers of road per day had come down to a bare three km from 11 km during the Atal Bihari Vajpayee-led government regime. PM Vajpayee’s two pet projects – the Golden Quadrilateral and the Pradhan Mantri Gram Sadak Yojana – launched then had come to a halt during the UPA tenure.

The creation of infrastructure then will change India. Indeed, it will (read our Cover Story in this issue). While the country’s railway network will witness improvement, emphasis will be given to building up the road network, using the inland waterways and bettering our ports. Focusing on all-round development, the government has charted out a plan to boost scientific warehousing especially in the rural areas so that food from farm to fork is not wasted because of the lack of cold storage and other facilities.

That is not all: to usher in large-scale investments in infrastructure, Finance Minister Arun Jaitley spoke about setting up of Infrastructural Investment Trusts (InvITs) and Real Estate Investments (REITs) in accordance with the regulations of the Securities and Exchange Board of India (SEBI). Added to that is the encouragement to investors to start PPP (Public Private

Partnership) projects.

A number of facilities were mentioned in the Union and Railways Budgets and writing about them would only waste premium space. However, it would be worthwhile to note that improving the infrastructure would not necessarily mean an end to the woes of the cargo and logistics stakeholders. What could be more important would be setting the right infrastructure to prevent and tackle megadisasters like the one that took place last year in Kedarnath.

A recent World Bank and Government of Japan report on the 2011 Great East Japan Earthquake – that saw the death of 20,000 people and losses of $210 billion – has concluded that rapid urbanization and global warming will cause future megadisasters. Titled, Learning from Megadisasters, the report, while mentioning the challenges overcome by sophisticated logistics providers, also points out that it was high time for governments to move away from building up disaster response facilities to a “culture of prevention”. The report focuses on the fact that Japan with its top-of-the-line disaster-response plans could do little when the megadisaster came: first with an earthquake, then a tsunami, and later a nuclear power plant accident, a power supply failure and total disruption of supply chains that affected industries around the world.

The ripple effects of the megadisaster saw Japan’s GDP falling 2.1 per cent from the previous year: in fact, the country saw its first trade deficit in 31 years. While industrial production went down 7.0 per cent, exports dropped down 8.0 per cent.

Around the world, Japanese electronics and automotive parts became scarce. Such was the power of the megadisaster!

This issue of C&L focuses on the expectations of the cargo and logistics community. A beginning has been made to rectify the wrongs that were done earlier but then there are a whole lot of course corrections to be done. We have tried to project the aspirations of the cargo and logistics community – as we try in every issue – and we hope that you, our readers, will find the time and patience to go through the issue that we have enjoyed putting together.

Happy reading!

tghosh@newsline.in

July 2014

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Cargo & Logistics ARTICLES NEWS VIEWS EDITS INTERVIEWS CLIPPINGS PROFILES NEWS DIGEST STATISTICS COLUMNS

CONTENTS

C&L

VOLUME III n NO 5

Editor-in-Chief

K SRINIVASAN Managing Editor TIRTHANKAR GHOSH Consulting Editor RAMESH KUMAR Senior Sub-Editor-cum-Reporter PUNIT MISHRA

COVER STORY

p14

The first steps to the promise of good days that preceded Prime Minister Narendra Modi’s election campaign have been taken. Stakeholders from the cargo and logistics industry who have been crying for better infrastructure, have at last received some solace now that the Prime Minister has set a 100-days deadline to start infrastructure projects.

FOCUS

p12

Even as air cargo volumes grow, freighter operators around the world are finding it difficult to keep their planes in the air – simply because bellyholds of widebodies are taking away most of the air cargo.

28

COLUMN

Sr. Proof Reader RAJESH VAID Correspondents ANJANA TANWAR, NAVEED ANJUM, CHARCHIT SINGH Designers NAGENDER DUBEY, MOHIT KANSAL Picture Editor PRADEEP CHANDRA Photo Editor HC TIWARI Staff Photographer HEMANT RAWAT Director (Admin & Corporate Affairs) RAJIV SINGH Vice President (Business Development) VINOD KAUL

Logistics and supply chain is gaining a lot of traction. The number of students pursuing this branch at home and abroad is on the rise.

SPOTLIGHT

p23

Peter Scholten, VP Commercial, Saudia Cargo talks about new business plans, the Skyteam membership, business from India, technological upgradation and much more.

32

NEWS IN BRIEF

CHAPMAN Freeborn Airchartering and Swiss WorldCargo announced a new partnership for delivering time-critical shipments.

Subscription GEETA JENA, JUHI ROHILLA Distribution PANKAJ KUMAR, BHUSAN KUMAR Executive Director RENU MITTAL For advertising and sales enquiries, please contact:

+91-9810030533, 9810159332 Editorial & Marketing office: News Kingdom Media Pvt. Ltd., 20, Nizamuddin West Market, Nizamuddin West, New Delhi –110 013, Tel: +91-11-41033381-82 All information in C&L is derived from sources we consider reliable. It is passed on to our readers without any responsibility on our part. Opinions/views expressed by third parties in abstract or in interviews are not necessarily shared by us. Material appearing in the magazine cannot be reproduced in whole or in part(s) without prior permission. The publisher assumes no responsibility for material lost or damaged in transit. The publisher reserves the right to refuse, withdraw or otherwise deal with all advertisements without explanation. All advertisements must comply with the Indian Advertisements Code.

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July 2014

Branc

Cargo & Logistics just in time

A bright spark in May

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he International Air Transport Association (IATA) recently released data for global air freight markets showing air cargo growth accelerated in May, with 4.7 per cent growth compared to a year ago. This is up from the 3.8 per cent yearon-year growth recorded in April. Cargo volumes, measured by Freight Tonne Kilometers (FTKs) were up across all regions, but with significant differences in performance.

The Middle East carriers reported 9.3 per cent year-on-year growth, whereas the corresponding growth rate for North American carriers stood at 2.4 per cent. The acceleration of growth reflects improved economic conditions. There are indications that world trade and business confidence to be improving after weakness in the first quarter. In particular, Chinese manufacturing activity rebounded in May, with a corresponding rise in export order growth.

“After several months of wavering conditions in the demand environment, the outlook for global air cargo appears to be stabilizing. That’s good news but the sector still faces an uphill battle to restore competitiveness and increase its share of trade growth. This will not be achieved with a business-as-usual mindset. The competitors to air cargo are innovating aggressively, cut-

QUOTE/UNQUOTE

ting end-to-end shipping times and improving efficiency. There is tremendous potential in the e-cargo agenda to help shorten average shipping times by 48 hours from the current average of 6.5 days. Airlines have a pivotal role through expanding the use of e-Air Waybills. But success will need a united approach across the value chain,” said Tony Tyler, IATA’s Director General and CEO. Asia-Pacific carriers recorded a strong increase of 5.3 per cent year-on-year. Regional trade volumes have picked-up again, and there are signs that the slowdown in the Chinese economy is easing.

North American carriers grew by a modest 2.4 per cent in May, down on the April year-on-year growth rate of 3.5 per cent.

This reflects the general slowdown in the US economy in the first quarter. However, the latest data supports a return to trade and

Road-rail freight combi project in Paris

S “China will one day understand the P3 Network was not created to attack the other shipping lines but to reduce costs and give a better, faster, more reliable service” ROBERT YILDIRIM President and Chief Executive, Yildirim Holdings (a CMA CGM shareholder)

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July 2014

business growth. Capacity was down 0.2 per cent.

European airlines expanded 3.4 per cent in May. The month-on-month rise was solid at 0.6 per cent (compared to 0.3 per cent growth recorded in April, 2014), pointing to a consistent improvement in economic activity. If GDP accelerates in the second quarter, that should support continued growth in air freight volumes in the coming months. Capacity increased 4.0 per cent.

Middle East carriers continue to see the highest rate of growth, expanding 9.3 per cent in May compared to a year ago. Stronger expansion in developed markets is combining with rising links to emerging economies to fuel growth. Capacity grew 10.6 per cent. Latin American airlines recorded an increase of 4.9 per cent year-on-year, responding to a pick up in trade growth. This may be a spike in business activity associated with the FIFA World Cup. Capacity climbed 4.5 per cent, slightly slower than demand. African carriers’ demand increased by 7.2 per cent in May, considerably ahead of the average growth of 2.9 per cent for 2014. Weaker growth in the major African economies in the first months of the year appears to be ending, which will hopefully fuel stronger performance in the months ahead.

ogaris has unveiled an 80 million Euro project to launch a scheduled combined road-rail freight shuttle service into an urban logistics hub in Paris’s 18th arrondissement district from an inland port situated 45 kilometers away.

Expected to create 300 jobs, the project is earmarked to start in 2017 and contribute to the reduction in the number of HGVs on Paris’s roads. To be built on SNCF land near the Gare du Nord, the urban hub would be served twice-daily by the ‘combi’ service, with each train transporting 40 road trailers or 80 smaller

models.

Norbert Dentressangle (ND) and UPS, as well as wholesaler Metro, are viewed as potential customers of the service. ND already uses the river Seine to transport goods in containers by barge destined for convenience stores in central Paris, saving almost half a million road miles each year.

Last September, the Paris Council presented its ‘green’ logistics charter for the city, designed to facilitate the distribution and delivery of goods in the centre of the French capital while respecting the environment.

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Cargo & Logistics just in time

TIACA’s first workshop receives a thumbs-up

D

elegates representing diverse sectors of the air cargo industry took part in the first TIACA Professional Development Workshop in the Netherlands in the end of June. The three-day educational experience culminated in students delivering presentations reflecting real-world air cargo business and operational situations.

Topics covered included market and competitive analysis, brand management, digital marketing, revenue management, understanding and analyzing financial statements, creating financial reports, business ethics, and leading teams.

“I really appreciated the respect from the start and sharing of experience and knowledge from the leaders, participants, and guest speakers,” said Patrick Teixeira-Ribeiro, AirBridgeCargo, one of the delegates. The workshop was the first commissioned and sponsored by TIACA in collaboration with Strategic Aviation Solu-

FIRST STEP: Emil Pettersson, Air Logistics Group, Freida Ordinario, Swiss WorldCargo, Patrick Teixeira Ribeiro, AirBridge Cargo Airlines, Jim Edgar, Boeing, Charles Edwards, NCCGL

tions International (SASI), following a joint industry study with IATA, ICAO, and FIATA released earlier this year, which identified the need for air freight-specific training to equip and educate a new generation of industry leaders.

Airlines, forwarders, handlers, and General Sales Agents (GSAs), as well as the World Bank, took part in the pro-

gramme, held near Schiphol Airport from June 25 to 27. “We are delighted that so many different sectors of the industry were represented at this first workshop and the useful interaction between enthusiastic and engaged participants,” said Jim Edgar, Regional Marketing Director, Boeing Commercial, and Chairman of TIACA’s Education and Research Committee. “Now that we have held our inaugural programme, we are looking forward to building on this success and hosting more educational events for the industry in the future.”

Lilian Tan, Executive Director – Learning and Development, SASI, and Charles H W Edwards, SASI Associate and Executive Director, North Carolina Center for Global Logistics led the workshop. “The objective was for participants to have a good appreciation of each field and how the topics fit together and play a role in successfully managing and leading a dynamic company in an ever-changing market,” said Tan.

SriLankan joins hands with Institute of Supply and Materials Management

S

riLankan Airlines and the Institute of Supply and Materials Management (ISMM) signed a Memorandum of Understanding in the beginning of July to exchange knowledge and facilities for the enhancement of travel and tourism education in the country.

SriLankan Airlines’, Chief Marketing Officer, G T Jeyaseelan and Institute of Supply and Materials Management, President, Anil Ponweera signed the MoU at SriLankan Airlines Office in Colombo.

Under the new agreement, there will be an array of knowledge-exchanging programmes ranging from aviation, travel and tourism industry, Procurement, Logistics and Supply Chain; for the benefit of the students of both institutions who are aspiring to pursue careers in travel and tourism and the

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July 2014

RIGHT STEP: Present at the MoU signing were Manager of SriLankan Technical Training, Manager of International Aviation Academy, General Manager - SriLankan Aviation College, Chief Marketing Officer of SriLankan Airlines , President of ISMM, Vice President of ISMM, Vice President and General Secretary of ISMM

industry personnel who are seeking higher educational opportunities.

These programmes are aimed at synergizing core competencies to develop the

skills of supply chain professionals to meet the requirements of the aviation industry while setting up a mechanism to generate supply chain professions to be abreast with the high employee turnover due to prevailing high demand in the industry. The focus of the programmes is to develop a succession plan in the critical functional areas such as – In-bound logistics, internal processes, outbound logistics, warehousing and inventory management. The courses are intended to cater to the emerging needs in relations to logistics and supply chain in the country.

The International Aviation Academy (IAA) of SriLankan Airlines has also received a prestigious recognition from the International Air Transport Association (IATA), as one of the World’s Top Ten Authorised Aviation Training Centres of its 2013 Premier Circle .

Cargo & Logistics Numbers

1,500

BOEING 747s

B

oeing delivered its 1,500th 747 to Germany’s Lufthansa Airlines at Paine Field in Everett, Washington. No other widebody aircraft has reached the 1500th mark. A 747-8i, the longest passenger jet in the world, the aircraft, registered D-ABYP is the 14th such model for Lufthansa’s fleet. The 747-8i is the sixth variant on the 747 line, which first took to the skies on February 9, 1969. The aircraft will wear a special commemorative logo, signifying its place as the 1,500th in the venerable line of aircraft that are now flying in their sixth decade. The delivery of 1,500th is just the latest milestone for the long-lived programme, came after:

50

PER CENT IMPORTS RESTRICTION BY TUTICORIN PORT

T

he congestion at the Tuticorin Port in Tamil Nadu is turning out to be a blessing for the International Container Transshipment Terminal (ICTT) at Vallarpadam, with cargo from the southern region of Tamil Nadu being diverted to Kochi. Tuticorin Port has put an embargo restricting imports by 50 per cent, owing to heavy rush at the Port.

Due to this, both importers and exporters are finding it difficult to move cargo as the em-

10

Three years after the first delivery of 7478– a freighter for Cargolux; 21 years after the delivery of 1,000th, originally delivered as a passenger plane to Singapore Airlines but now flying with Southern Air as a 747-400BCF; 33 years after the delivery of 500th – a 747-200B delivered to SAS as a Combi which later became a freighter for UPS; 44.5 years after the first delivery of a 747 to Pan Am on December 12, 1969.

Much later, this aircraft flew as a converted freighter for Evergreen.

Lufthansa was also the launch customer for the original 747-200 freighter built in 1971 and delivered on March 9, 1972 after certification.

July 2014

bargo is on account of congestion at the Port.

Tuticorin is one of the major ports for the export of cashew kernel and import of raw cashew. The majority of the traders who use Tuticorin Port for this purpose are from Kollam. In 2013-14, the country imported over four lakh tonnes of raw cashew, valued `2,344 crore. Around 40 per cent of the cashew imported is routed through the Tuticorin Port.

29

PER CENT DROP IN EXPORTS OF ODISHA IN 2012-13

E

xports of goods from Odisha saw a drop of 29.36 per cent at `11,448.48 crore in 2012-13 compared to `16,207.34 crore logged in the last year as mineral exports nosedived. During the period under review, mineral exports from the state shrunk to `2,427.56 crore from `9,259.48 crore exported in 2011-12. The exports of minerals have declined by 73.8 per cent in 2012-13.

Officials said that a steep export duty of 30 per cent levied by the Government of India and the state government’s policy to restrict at least 50 per cent of iron ore production for domestic consumption has hurt exports. According to a report released by the Directorate of Export Promotion and Marketing (DEPM), barring mineral exports, all other categories of products have registered growth in 2012-13 compared to the previous year.

12.4

PER CENT GROWTH INDIA’S EXPORTS IN MAY

I

ndia’s exports grew by a double-digit pace for the 1st time in seven months in May, narrowing the trade deficit and setting the ground for easing of restrictions on gold imports. The Ministry of Commerce & Industry said, exports previous month rose 12.4 per cent to $28 billion from a year earlier, while imports drop 11.4 per cent to $39.23 billion. In April-May, 2014-15 fiscal, exports grew by 8.87 per cent to $53.63 billion. Gold imports, which had in 2013 led to a widening of the trade deficit and consequently a worsening current account deficit (CAD), drop 72 per cent to $2.19 billion, according to the Commerce Ministry’s data. Encouraged by the trade data, the Commerce Ministry has asked the Finance Ministry to ease gold import restrictions, which were imposed last year to check the widening CAD.

6th

B777F FOR QATAR AIRWAYS CARGO

Q

ATAR Airways Cargo has taken delivery of its sixth B777 freighter. The airline recognises the need to continuously expand capacity and the number of destinations served.

The latest Qatar Airways Cargo B777 freighter has a payload of up to 102 tonnes and is capable of flying 4,900 nautical miles with a full payload, making it the world’s longest-range twin-engine freighter. It accommodates 27 standard pallets on the main deck, whilst the lower cargo hold has capacity for 10 pallets, as well as 17 cubic metres of additional bulk cargo. Recently, new freighter destinations of Zaragoza, Hyderabad, London Stansted and Delhi were added to the network and the new cargo route to Mexico, effective 11 June 2014, marked the start of freighter operations into Latin America.

1,600 A

CONTAINERS LOST AT SEA EVERY YEAR

six-year report into the shipping industry has shown that on average more than 1,679 containers are lost at sea each year. World Shipping Council (WSC) calculated this figure, following a survey of more than 70 per cent of the shipping industry from 2008 to 2013.

The report hoped to dispel the myth that as many as 10,000 shipping containers were lost each year. The highest figure recorded was in 2013, when 5,578 shipments were lost. This unusually high figure was largely explained by the loss of MOL Comfort, which sank off the coast of Yemen last year with 4,293 containers on board, making for the worst containership loss in history. Excluding catastrophic losses (more than 500 containers each) the annual average comes down to 546, but the WSC is keen to reduce this number further still by introducing new safety improvement initiatives. The shipping industry transports 120 million containers per year with an estimated value in excess of $4 trillion.

Cargo & Logistics focus

wikimedia.org

FREIGHTERS: YES. NO. MAYBE

As air cargo growth falters, freighter operators around the world are finding it difficult to keep their planes in the air.

Today, belly cargo has become more important and economical than freighters. In such a scenario, both Boeing and Airbus have projected enhancement of the international freighter fleet. Will that be possible? A look at the situation

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July 2014

HOPES FOR THE FUTURE: An aerial view of Boeing’s Everett factory where aircraft are assembled

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oeing projects a demand for 36,770 new airplanes – and that includes freighters – over the next 20 years, an increase of 4.2 per cent from last year’s forecast. The manufacturer released its annual Current Market Outlook recently, estimating the total value of those new airplanes at $5.2 trillion. “This market is strong and resilient,” Randy Tinseth, Vice President of Marketing, Boeing Commercial Airplanes, said. “With new and more efficient airplanes entering service, the growth in air travel is being driven by customers who want to fly where they want, when they want”, he added.

While that may be true for passenger planes, there is widespread belief that the era of freighters has ended. It has been tough for the airfreight industry and, as a result, many cargo-focused gateways in Europe and North America have reported a decline in volumes or little or no growth.

Indeed, the downturn has been such that some traditional all-cargo gateways, such as Paris Vatry, have now started handling passenger services to boost revenues.

As a result, airline freighters have been parked in the desert and quite a few have reduced services. At the IATA World Cargo Symposium (WCS) 2014, Fred Smith, Chairman, President, and CEO of FedEx described the 747-400 and MD11-9 as the workhorses of a golden age. “Now they have become very expensive to run, and airlines need to rethink their freighter strategy. A triple seven-freighter flight from Hong Kong to Anchorage costs $30,000 less than a 747-400F while carrying almost the same payload. New, fuel-efficient, twin-engine freighters in the form of the 777F and the A330F provide airlift with much lower unit costs than the 747-400 and MD11. Given all these factors, and with current freighter capacity exceeding demand, 43 Boeing 747-400s and 20 MD11s are parked in the

focus

desert, and six 747-400s and four MD-11s have been scrapped,” he said.

Former Lufthansa Cargo head Karl Ulrich Garnadt told the media that he too didn’t believe there was a strong future for all-freighter operators. “The combination carrier model is the only one I believe has a future in traditional air freight,” he said.

As recently as three months ago, Lufthansa Cargo stopped its freighter services to Detroit in the USA because it was “just not developing the way we wanted”, according to Achim Martinka, Vice President for the Americas at Lufthansa Cargo. At the same CNS conference, Martinka commented that some airlines had cut back freighter operations. That was not surprising since revenues were going down – despite the fact that carriers’ tonnage remained constant.

Lufthansa will see five 777 freighters inducted into service this year with an option for five more. In such a situation, Martinka said it would be difficult to convince the management on how to utilize the additional freighters.

Many industry leaders have started rethinking about freighter operations.

IAG Cargo recently signed a long-term commercial agreement with Qatar Airways to purchase capacity on Qatar-operated freighters, terminating their agreement with Global Supply Systems for three leased B747-8 freighters. According to Martinka, cargo carriers getting into a partnership like IAG Cargo has done was the sensible way out. That helped in sharing “the risk and in order to support each other in filling those aircraft”, he said.

Meanwhile, Air France-KLM has cut freighter capacity by 11.5 per cent while Cathay Pacific too has withdrawn freighter operations into Manchester. Cathay, for example, had chalked out plans that would have given its cargo division 35 freighters by the end of 2016: 10 B747-8Fs, eight B777Fs, six B747-400ERFs, six B747-

AIRBUS.COM

MAKE IT BIG: The common fuselage and wing configurations of Airbus’ A330 and A340 allow these long-range jetliners to be built on the same final assembly line at Toulouse/Blagnac Airport in France. Etihad Airways, for example, was the launch customer for the Airbus A330-200F freighter.

400Fs and five B747-400BCFs. After retiring a few of the older ones, it would have a total fleet strength of 30 aircraft.

Today, however, it has cut down on its original plan: it will only have 20 freighters at the end of 2016.

Even so, it is interesting to note Boeing’s projections. The airplane manufacturer has said that air cargo traffic has grown 5.2 per cent per year since 1980 and the freighter fleet, which was now at 1,690, would grow to 2,730 till 2033. Boeing predicted that future freighter deliveries would be led by demand for large widebodies. Till 2033, the cargo fleet demand would be 840 for the new and 1330 for the converted, in which large production would be 590 (more than 80 tonnes), widebody conversions would be 370 (40 to 120 tonnes), medium widebody production would be 250 (40 to 80 tonnes) and standard body conversion would be 960 (less than 45 tonnes).

Before Boeing, Airbus had released its Cargo Global Market Forecast in October 2013. According to Airbus’ forecasts, worldwide air freight traffic would grow by an average of 4.8 per cent annually over the next 20 years, almost doubling the required global freighter fleet to nearly 3,000 aircraft. The forecast showed that the overall worldwide air cargo demand by the year 2032 would require around 2,700 new and converted aircraft. Over half of these would be needed for fleet replacement –

driven by current old aircraft retirements – with the remainder being for growth.

Of these 2,700 aircraft, 870 would be factory-built freighters worth approximately $234 billion, while around 1,860 would be converted from passenger aircraft. A further 175 in 2032 will be aircraft which are already in service as freighters today.

Andreas Hermann, Airbus’ Vice President, Head of Freighters said at the time of the forecast’s release: “Looking forward after a difficult few years, world trade is showing improvements and diverse emerging markets will call for increased flexibility in air cargo transportation – for which mid-size freighters will be the primary means to achieve this. This is why Airbus forecasts that the core of future freighter requirements will be in the midsize category, where modern-technology freighters will play a large part in future fleet replacement and long term growth,” he added.

Whatever the projections, belly space has taken over as the best method of cargo transport in comparison to dedicated freighter operations. According to figures, the topfive in cargo among passenger carriers is Lufthansa, Korean Airlines, Cathay Pacific and Air France-KLM Group, which together carried more than 1.3 million tons of freight in 2013. If air cargo does not recover swiftly enough, freighter manufacturers would find the going difficult.

July 2014

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Cargo & Logistics Cover story

WAIT FOR GOOD TIMES GETS SHORTER Infrastructure: The word has been bandied about for so long that it was becoming irrelevant. It encapsulated the one demand that has been on the lips of every stakeholder in the cargo sector. The Finance Minister has listened. The Budget speech has ushered in the creation of infrastructure – spanning across land, water and air – that will bring in more connectivity and ease of transport. C & L takes a look at the first steps towards “achche din” for the cargo and logistics sector.

P

rime Minister Narendra Modi-led government completed its first test: it delivered a Budget that was far from populist. The Budget, heralded as the most important economic events in the country, one was clear about the government’s intent. The focus would be on creating or enhancing infrastructure. The annual Railway Budget first showed the way and the Union Budget for 2014, made a strong declaration. Before the Budget, chambers of commerce and other associations made their wishlists and hoped that the Finance Minister would incorporate their demands.

This time around, while the cargo stakeholders did not actually present

their wishlists to Finance Minister Arun Jaitley, many voiced concerns about the lack of infrastructure. In fact, the cries for improvement and enhancement of infrastructure may have sounded a tad repetitive but they have simply carried on because this government came on promises to bring in “achche din (good days or better times)”.

Said Sameer Khatri, Regional Vice President, Indian Subcontinent and Managing Director, India of UTi Worldwide, India, “I personally feel that our ports, our roads, our airport infrastructures are something which could do a lot. We do see a fair amount of work being done to upgrade

ROBUST LOGISTICS AND SUPPLY CHAIN NEEDED FOR PROGRESS The new government’s emphasis on economic development is a welcome step in the right direction.

For any progress to take place, it is essential to have a robust logistics and supply chain industry which will support the growth aspirations of the government. A serious focus on development of infrastructure i.e. cold storage, ports, airports

and road construction is required with these projects being closely monitored, to ensure timely completion of the same.

Implementation of GST within a timeframe will go a long way in re-structuring of supply chains, which will eventually lead to an increase in trade for the country.

— SAMAR NATH CEO, DHL Global Forwarding

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July 2014

cover story

the airport infrastructure in the metros — that is a welcome sign. However, I do not see that kind of an inititiave being taken on the port infrastructure which is quite a worry because there is a huge shift from air business to ocean because of the cost. I think it is important to upgrade our infrastructure to cater to the growth which is happening in the ocean business.”

Khatri is not alone. One of the country’s veteran freight forwarder and Customs brokers, Shantanu Bhadkamkar (he was

immediate Past President of FFFAIthe Federation of Freight Forwarders’ Associations in India and recently appointed Chairman of the International Federation of Customs Brokers Association –IFCBA) was more forthright. Talking to C & L, he said that the country urgently needed good infrastructure. He also said that the infrastructure should be made available at competitive prices while rendering top class service. “That isn’t a tall order,” said Bhadkamkar, “it is something every single

successful economy has done. This is the least we need to fuel growth.”

One person who expected more from this year’s Budget was Bharat Thakkar. The immediate past President of the Air Cargo Agents Association of India (ACAAI) and a veteran freight forwarder, he had made an impassioned plea to the new government to set right the wrongs that have plagued the cargo and logistics sector. He said that Continued on Page 18

July 2014

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Cargo & Logistics Cover story

GIVE CARGO INDUSTRY STATUS

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Bharat Thakkar, immediate past President of the Air Cargo Agents Association of India and a veteran freight forwarder, makes an impassioned plea to the new government to set right the wrongs that continue to plague the cargo and logistics sector

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July 2014

he Indian Logistics Industry should be accorded ‘Industry Status’ to enable it to access capital for upgradation of the physical infrastructure to international standards and bring down the operating costs to benefit the EXIM trade.

A cargo facility is the window that showcases the capability of a country’s economy. The PPP (Public Private Partnership) Model was a turning point in the history of India’s economic growth especially in ports and airports. In fact, significant changes have been brought in

by PPP models. While the passenger sector should be given adequate facilities, it should not be done at the cost of and at the neglect of cargo facilities.

We are all aware that some time in 2008, the Ministry of Civil Aviation (MoCA) introduced a draft of AERA (Airports Economic Regulatory Authority). What was missing in the draft was cargo. The Madras Chamber of Commerce followed by Air Cargo Agents Association of India (ACAAI) took up the issue with the Ministry of Civil Aviation explaining that cargo should be included.

Soon afterwards, ACAAI was invited by the Chairman of the Standing Committee on Transport, Tourism and Culture, Sitaram Yechury, Member of Parliament, to explain why cargo should be in the Bill and we did so. After several Standing Committee Meetings where ACAAI was an invitee, AERA in 2009 became an Act and cargo was included. AERA monitors tariffs of airport services and if any tariff revision has to take place stakeholders have to be convinced that better services and additional investments have been made.

Today, one cannot have any objections to tariff revision, when we have the Competition Commission of India (CCI) in place which encourages competition and lets users decide which facility is good for movement of their shipments.

Till date, neither benchmarking of any performance nor any conditionalities to bind Custodians for non-performance have been introduced. From the time flights touch down to the physical removal of cargo, Custodians should be provided with a time frame for completion of every activity and there should be accountability (including financial accountability) for any delay in clearance of cargo. Currently, penal provisions are thrust on users (in terms of storage, demurrage, etc). This is because all financial liabilities caused by custodians are passed on to the users. Until conditionalities and benchmarks become an integral part of the tariff, no upward tariff should be touched. AERA should be empowered to introduce conditionality.

India’s infrastructure requirements are humungous and the government alone cannot be expected to make it in any given time frame, hence PPP’s success is a must.

However, timely completions must be achieved as major delays are hurting our economy big time.

In 2010, MoCA formed a Working Group on Air Logistics and Express Industry under the Economic Advisor to MoCA who worked on a draft report that was readied in December 2011, the 100th year of Indian civil aviation. The report was released in May 2012. As a follow-up, the APLB (Air Promotion Logistics Board) was formed in July that year. Senior officials of all ministries were invited to join the board.

cover story I was privileged to attend the first three meetings as President ACAAI at that time as a special invitee.

My association was as part of the Working Group on Air Cargo. The aim of the Working Group was to bring about improvements while bringing down transaction costs borne by exporters and importers due to shortcomings in facilities of not only the terminal operators but other regulators at major airports like Mumbai, Delhi and Chennai, the major airports; and to reduce dwell time of cargo from 12 to 8 hours after arrival of goods which was in keeping with leading airports in Asia.

India’s biggest challenge is efficient, planned transport infrastructure with dedicated expressways linking production centres to highways/railways which link to ports and airports for seamless flow of goods.

This will bring down their transaction costs through faster transits with least amount of time spent by goods sitting during local transportation.

It has been the stakeholders’ view that Terminal Operators must introduce benchmarks. It has been the demand of our industry that we should have a systemdriven process. Terminal operators must review their processes with transparency, before we take any steps. It is about time that all stakeholders must work in tandem without pointing fingers at each other to ride out the dipping economy and look at the path for long-term gains.

The new regime is aware of the issues faced by the cargo and logistics industry and are obliged to correct the wrongs since everything does not start and end at the doorsteps of the terminal operators. There is need to look beyond, as there are delays from other agencies as well like Customs brokers filing late bills of entry since consignees are not ready or due to the ICEGATE System being slow/erratic or even down.

The frequent breakdowns and glitches in the EDI System is not only a cause of great concern but also puts all stakeholders at risk, which need not be dwelt upon. It is true that whenever the ICEGATE (Indian Customs Electronic Commerce/Electronic Data Interchange – EC/EDI – Gateway) system fails, all concerned are intimated but

that is hardly any solution since a Central Board of Excise and Customs (CBEC) guideline states that manual mode has to be adopted when system failures occur. There is reluctance on the part of the Customs authorities to implement the Board’s directive. Result: trade suffers and the nation comes to a standstill.

The need of the hour is for the immediate appointment of a central team of CBEC officials for assessment of Bills of Entry for all Imports from remote locations, as a majority of shipments coming in are under Accredited Clients Programme (ACP) Risk Management System (RMS).

Mandatory use of Digital Signature in ICEGATE: ICEGATE is the e-commerce portal for CBEC. It is the ED1 gateway for processing all import and export customs documentation and is the sole medium of transmission as well as processing of Bill of Entries as well as Shipping Bills. Importers and Exporters also avail of this facility to file their documents, make payments and track the status. It is now essential to make Digital Signatures mandatory in ICEGATE. This would be in keeping with the progress in EDI implementation and also in tune with the rest of the world. Most organisations now use digital signatures.

Electronic processing of amendments: In keeping with the desire to have 100 per cent EDI implementation and moving towards a paperless environment, we must strive to convert all steps in the entire process to the electronic medium. One of these processes is that of amendments. It will also go a long way to create transparency, speed and efficiency.

The Shipping Trade Practices Act: The Act was formulated and introduced in Parliament to ensure transparency in the various charges levied on the EXIM trade.

There is an urgent need to implement this law to ensure that unjustified levies (Container Imbalance Surcharge, Rupee Depreciation Surcharge, Currency Adjustment Factor, Fuel Surcharge, Security Surcharge, Congestion Surcharge, etc) are curbed and the cost to the EXIM trade is controlled.

SINGLE WINDOW CLEARANCES

I

f we are to speed up the processing time of exports we need to make available the facility of a Single Window Clearance for permissions required prior to export of pharmaceuticals, medicines, life-saving drugs, bulk drugs amongst other commodities. Currently some of these processes and clearances take more than one day. There are different agencies involved for different clearances. This stretches the limited resources and puts them under severe pressure. A single window clearance facility will be of tremendous benefit to all concerned.

In fact, the same processes can be followed for all modes of air cargo – whether arriving by courier or as general cargo. The trade is at a distinct disadvantage because we take a longer time to clear consignments in the import cargo shed in the air cargo complex. The same shipment when arriving by courier mode is cleared within a couple of hours and with much less paperwork. We do not understand why there should be such a difference in procedures. It is our understanding that the Indian Customs administration and the World Customs Organisation (WCO) is clearly of view that no particular mode can be given a special preference.

Inclusion of export-related activities in the Service Tax Negative List: Exports need to be encouraged for the health of our economy. We need our exports to be competitively priced in the global market.

Adding to costs by applying several taxes only make our exports expensive when compared to our global competitors. To comply with the WTO requirements, several schemes which have helped our exporters have been withdrawn. The least that can be done is not add more costs. All activities directly related to the export of goods from lndia must be put on the negative list so that they can be exempted from the application of Service Tax. As told to Tirthankar Ghosh

July 2014

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Cargo & Logistics Cover Story

INFRA DEVELOPMENT NEEDS AS MUCH PRIORITY AS GOVERNANCE The country urgently needs good i n f r a s t r u c t u re .

While planning, it needs to be 10 years ahead of the International quality standards, 10 years ahead of the estimated capacity requirements at the time of the execution; and making it available at competitive prices while rendering top class service. This isn’t a tall order, this is something every single successful economy has done. This is the least we need to fuel growth and to realise our potential and to be competitive in the global market place.

Good infrastructure includes a reliable and fair regulatory infrastructure.

It also includes professionally trained vocation specialist human resources for effective usage of resources and delivery of quality services/products.

We need good cargo terminals and cargo hubs (including multimodal hubs) for all modes of transport that are ef-

Continued from Page 15 the cargo industry should have been given ‘Industry’ status – a demand that has been pending for a long time – to enable it to access capital for upgradation of the physical infrastructure to international standards and bring down operating costs to benefit the export-import trade.

Industry-status aside, Thakkar pointed out that “a cargo facility was an window that showcased the capability of a country’s economy”. The PPP model, according to him was a turning point in the history of India’s economic growth especially in airports. The significant changes brought in by the PPP model has upgraded the passenger facilities but it should not have been done “at the cost of and at the neglect of cargo facilities”.

The silver lining – if there was any in the Budget – came from Finance Minister Arun Jaitley’s announcement about the scheme to

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fectively connected to ports, airports and rail cargo terminals. The Dedicated Freight Corridor Corporation of India (DFCC) is an important project to focus upon for speedy completion. Yet we’ll, in addition, need to create and connect all the manufacturing clusters by good roads, rails and other modal connectivity. The inland waterways and coastal shipping routes need to be developed with their usage being incentivised as a support for green and energy efficient modes, in addition to the bonus of decongestioning of other modes. This will be a game-changer in developing a decentralised cluster-based industrial development and growth model.

The economy can’t grow in absence of well developed infrastructure – all our infrastructure is used beyond its capacity. The optimal use is about 60 per cent.

Infrastructure development, therefore, needs as much priority as general governance improvement.

Very little, if any, original research has been done in SCM and Logistics.

establish airports in metros and non-metro cities through public-private partnership and the enhancement of the financial allocation for civil aviation by 11.4 per cent to `9,474 crore in the budget (in the last fiscal it was `8,502 crore). “Despite increase in air connectivity, air travel is still out of reach of a large number of aspirational Indians.

Scheme for development of new airports in Tier I and Tier II (cities) will be launched for implementation through Airport Authority of India and PPPs,” Jaitley said in his Budget speech.

That intent by the government to move ahead and provide the necessary infrastructure for aviation in the country has been commended by stakeholders – both from the cargo and the passenger sides.

Along with the plaudits, demands have been raised from certain quarters with one directly related to air cargo. The Association of Private Airport Operators (APAO) –

If this sector has to function as a lever that acts as a force multiplier, it will be possible only by nurturing a high level of professionalism. To breed high quality professionalism, we’ll need to invest in original and cutting edge high-end multi-faculty research in logistics and SCM covering all the aspects. It’s not sufficient to limit human resource development to working level skill at one end and cutting edge research on other, development of middle level management as an optimiser and manager of the delivery mechanism is also critical for delivery of results.

Development of the logistics infrastructure goes beyond investing right funds at the right place at the moment, abilities to use infrastructure efficiently in the best interest of the economy is even more important.

— SHANTANU BHADKAMKAR Immediate Past President of FFFAI, Chairman, International Federation of Customs Brokers Association (IFCBA)

comprising the airports in Delhi, Mumbai, Bengaluru, Hyderabad and Kochi – has sent out a letter to Civil Aviation Minister A Gajpati Raju to liberalise the Indian skies for aviation stakeholders. The letter points out that Open Skies would help “to encourage passenger/cargo traffic, liberal bilaterals should be encouraged with no restrictions, similar to the USA policy”. In addition, the letter has also said that the ministry should focus on creating aviation infrastructure in Tier II and Tier III cities. Sometime ago, the Prime Minister asked ministers and officials from different departments to do detailed presentations. These have resulted in timebound roadmaps – of 100 days – for the ministries and departments. Four infrastructure ministries – civil aviation, shipping, road transport and railways – have come in for special focus. At the presentation

by Civil Aviation Minister Ashok Gajapathi Raju Pusapati, the obstacles facing the sector

Cargo & Logistics INTERVIEW were highlighted leading the Prime Minister to comment that “challenges have been highlighted but no achievements have been mentioned”.

Indeed, in an interview with a financial daily, the Civil Aviation Minister accepted that the sector was going through turbulence and that there were no “simple answers” to the problems that could not be “wished away”. The minister was well aware of the potential of air cargo. He said that “though there is huge growth in passenger and cargo traffic in and from India, we have a long way to go”. India, he said, was still quite far away from the US, the world leader in cargo.

“Indian cargo aviation has great potential, particularly in agro-based businesses, floriculture, fisheries and allied sectors,” he pointed out. Air cargo stakeholders believe that the recent push by the governmentowned Airports Authority of India (AAI) to establish domestic cargo terminals at 24 airports and construct 50 low cost airports around the country came because of the Prime Minister’s interest in developing the aviation sector. Already work is on to ensure that the air freight stations built near airports start operations. In addition, to boost

PIB

TOWARDS GROWTH: The Union Budget 2014 proved quite an inclusive one as it concentrated on infrastructure. Seen in the picture Finance Minister Arun Jaitley and Minister of Commerce and Industry (Independent Charge) Nirmala Seetharaman on their way to present the Budget

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SERVICE PROVIDERS EXPECT GOVERNMENT TO WORK ON FUEL PRICES The new government is expected to boost the phase of economic activity further with infusion of new measures and opening new avenues for growth.

Logistics sector being one of the backbone industries for the economy is going to be affected by the policies and measures adopted by the government.

As a service provider, we expect the government to work on fuel prices – a direct proportion of logistics cost, to bring India under a uniform tax regime,

regional connectivity, the Civil Aviation Ministry will enhance facilities at a few airports in the centre of the country to start receiving international flights.

In what could be termed as a reply to the demands from the cargo and logistics industry stakeholders, the railway ministry has made some moves. If the Railway Budget is any indication, the Indian Railways would surpass the loading target of 1047 mn tonnes for 2013-14. Among the other initiatives are: • Carrying Capacity + 9 tonne + 1 tonne routes being planned

make provisions for necessary infrastructure development for transport and encourage economic zones for optimized growth.

Revamping the ports through investments in mechanization, infrastructure and overall efficiency improvement measures, are required to make international trade smoother and competitive. Additionally creation of mega ports with world class infrastructure will help achieve economies of scale — REINER A. ALLGEIER Managing Director, Schenker India Private Limited

•

Easing of some restrictions on movement of imported commodities through containers • Carrying capacity of 20 feet containers increased by four tonnes • Introduce Parcel Terminals and Special Parcel Trains with scheduled timings.

• New concept of ‘hub and spoke’ for parcel business • Third party warehousing in Special Parcel Terminals envisaged • Dedicated Freight Corridors on Eastern and Western Routes – leading to strategically critical capacity augmentation The business daily Mint termed the Railway Budget as one that was “Long on vision, short on specifics” – painted by Railway Minister D V Sadananda Gowda was an optimistic one – at least for the cargo and logistics sector. Port connectivity has been taken up by the railways through the public-private partnership (PPP). In fact, according to the minister, the Railways had received in-principle approval for developing rail connectivity to the ports of Jaigarh, Dighi, Rewas, Hazira, Tuna, Dholera and Astranga under the Participative Model Policy of the Railways, amounting to a total of over `4,000 crore.

Those in the logistics sector welcomed the Railway Budget. To begin with there

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Cargo & Logistics INTERVIEW

PIB

MOVING AHEAD: Amid high hopes, the Railway Budget 2014 gave freight operators some relief by announcing sops and more facilities

was the introduction of high speed trains for timely delivery of goods. In addition, the proposal to bring in FDI to develop worldclass rail infrastructure will ensure that the railways are modernized. There are plans to increase the capacity of cargo containers and the creation of an independent Rail Tariff Authority to advise on fares and freight will bring in competitiveness.

Vineet Agarwal, Managing Director, Transport Corporation of India, was quoted saying that the TCI had recommended a Multimodal Policy for the domestic market for seamless connectivity across different modes of transportation. However, that had not been touched upon in the rail budget.

He mentioned: “The focus on improving the country’s freight network by setting up a dedicated freight corridor on the Eastern and Western Routes and third party warehousing in Special Parcel Terminals will lead to

critical capacity augmentation – thus facilitating faster movement of goods and de-congestion of existing routes. We hope that this policy will later be extended to the entire time-sensitive cargo segment.”

Other than the emphasis on creation of new airports and enhancement to railway infrastructure by the government, what has given rise to “better times” is the assurance given by the Finance Minister Jaitley that his ministry would work to implement GST (Goods and Service Tax) around the country.

(The country still does not have an uniform GST and freight transported from one to any of the 29 states of India are subjected to taxes.) DHL’s Samar Nath pointed out that the implementation of GST within a timeframe will go a long way to re-structure supply chains, which will eventually lead to an increase in trade for the country.

On the port front, 16 new port projects

IMPLEMENTATION OF GST WILL HELP THE INDUSTRY “The Union Budget 2014 has given a fresh impetus to the infrastructure sector, which is a good thing.

Investments in roads all over India will help the freight forwarding and logistics Industry in faster movement of cargo and efficient national distribution services.

The investment in new ports will ease congestion on existing ports and open-

ing of new airports in Tier II and III cities will give us an opportunity to extend our network to those cities. An early implementation of GST, as referred by Finance Minister in his Budget speech is a welcome move and will help the industry in movement of goods / cargo efficiently with less of restrictions” — AJAY SEHGAL Director Finance & Accounts- Schenker India Private Limited

have been proposed by Finance Minister Jaitley. Along with that, a major move has been initiated to start inland waterways with a project for the river Ganga that will be completed over a period of six years at a cost of `4,200 crore. The ‘Jal Marg Vikas’ (National Waterways-I) will be developed between Allahabad and Haldia, covering a distance of 1,620 km. That will usher in commercial navigation of 1,500-tonne vessels carrying passengers and cargo.

The government was equally worried about the lack of roads. “A modern nation needs multiple sources of transport. A country of the size of India must have a transport network which can ensure faster travel across cities which are geographically distant. This will also improve the supply chain in transporting goods across cities. We will initiate work on select expressways in parallel to the development of the industrial corridors. For project preparation, NHAI shall set aside a sum of `500 crore,” said the Finance Minister in his Budget speech.

Along with the enhancement and construction of roads, the government has proposed to raise warehousing capacity to encourage farmers and has allocated `5,000 crore for the National Warehousing Fund for 2014-15. These warehouses would increase the shelf life of agriculture produce and prevent the wastage of fruits and vegetables.

Perhaps, the most important among the Finance Minister’s announcements was the one about the setting up of the National Industrial Corridor Authority at Pune.

Being established with `100 crore, the authority will coordinate the development of industrial corridors with smart cities linked to transport connectivity. The corridors that will be completed in the near future include the Amritsar-Kolkata Industrial Master Corridor. Master Planning of three smart cities in the Chennai-Bengaluru Industrial Corridor will also be completed. Further, the perspective plan for the Bengaluru-Mumbai Economic Corridor (BMEC) and the VizagChennai Corridor would be completed with provision for 20 new industrial clusters.

The country’s cargo and logistics industry awaits for “achche din” to come.

—Tirthankar Ghosh

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July 2014

spotlight

SAUDIA CARGO SETS NEW RECORDS When most other cargo carriers have been staring at deep red gashes, Saudi Airlines Cargo did remarkably well in 2013, said Peter Scholten, Vice President Commercial, Saudia Cargo, in an interview with C&L plan entail?

C&L: How was 2013 for Saudia Cargo?

Peter Scholten: 2013 has been a very successful year for Saudia Cargo. New records have been set, revenue and tonnage wise.

You have by far the biggest freighter fleet in the region: four MD-11Fs, four B747-400Fs, four B747-200Fs and one A310F. We understand two more freighters will join the fleet in the middle of this year. When most carriers are reducing capacity, how is Saudia finding the cargo to fill these freighters?

The company’s fleet consists of (4) MD-11, (1) 747-200, (7) 747-400, and (2) 747-8F. Saudia Cargo is concentrating on those markets and traffic lanes with long-term growth potential thus being able to grow in a flat or even shrinking market.

Saudia’s aspirations to become the top global cargo player is obviously based on a solid business plan. What does this

Saudia Cargo concentrates on traffic lanes with solid midterm growth potential and develops it’s network based on concrete customer requirements.

At one point of time, not so long ago, everyone spoke about Africa. How much has the Africa connections helped Saudia Cargo?

Lanes to and from Africa form an integral part of the Saudia Cargo network. Further growth is expected.

Specifically, tell us about business from India. What kind of tonnages are you doing?

2013 ISC boarding’s is 74,647,406 Kg

How has the Skyteam membership helped Saudia Cargo?

Saudia Cargo has not joined Skyteam yet, but is further exploring the benefits of the program.

What kind of technological upgradation have you undertaken for growth?

Saudia Cargo is investing in further developing the infrastructure of its hubs, and diversify its product offers as well as the continuous fleet renewal program

How do you see 2014 playing out?

Though air cargo is on a slow rise, IATA chief Tony Tyler says that Asia will lag behind.

We expect further growth on all major traffic lanes including routes to and from Asia.

There was news that Saudia Cargo is planning to launch trucking services in Saudi Arabia. Do you think it will help since you will be shifting focus from your core competence? Also, are there plans to tie-up with trucking services in other parts of the world?

Trucking services are only being used to complement existing freighter services and in case they are matching with actual customer requirements.

We understand that the Cargo division is going for an IPO. What do you plan to achieve with the IPO? No comments in this stage.

July 2014

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Cargo & Logistics SPECIAL REPORT

CARGO TERMINAL FOR AMRITSAR

A permanent cargo terminal with temperature controlled storage facilities will be set up at the Sri Guru Ram Das Jee International Airport at Amritsar. But till direct flights to Europe and North America restart, perishable exporters will have to make the trip to Delhi to send their goods.

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here seems to be a sudden realization in India’s Civil Aviation Ministry circles that cargo has been ignored for far too long. Though the fact might not be accepted by officials in the ministry, proposals for establishment of cargo facilities that were pending for quite some time have been given the green signal. The moves, perhaps, are also linked to Prime Minister Narendra Modi’s thrust on infrastructure.

One such proposal is to establish a permanent cargo terminal at Amritsar International Airport. The state government of Punjab had sent a request to the government-controlled Airports Authority of

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July 2014

India that operates the Sri Guru Ram Das Jee International Airport at Amritsar to turn the existing temporary cargo terminal into a permanent one. The state had also said that the land required to enhance the cargo facility would be given by the Punjab government.

In its request to AAI, the Punjab government pointed out that a permanent cargo terminal was required to help exporters of fruits and vegetables. While these perishables exporters were losing business because of the lack of international flights from Amritsar, the fact that there were no temperature controlled storing facilities had compounded the problem. Not too long

ago, there were flights from Amritsar to London, Birmingham and Toronto. These flights were used by exporters to send fruits and vegetables to the Punjabi diaspora settled in Britain and Canada.

Now with the government at Delhi giving the nod for the establishment of the permanent cargo terminal at the international airport in the city, there is hope that international flights will be restarted. Amritsar airport has been handling consignments of baby corn, snow peas, sugar snap, okra and other vegetables from the state as well as the adjoining state of Himachal Pradesh to Europe and Canada from the Temporary Perishable Cargo Centre since July 2006 when

SPECIAL REPORT

A

AHMEDABAD’S PERISHABLE CENTRE IS READY

hmedabad airport may soon start operations at its perishable cargo centre, as it has finally received Central government’s approval for the use of Centre for Perishable Cargo (CPC) built at the city’s Sardar Vallabhbhai Patel International Airport in 2012.

The Minister of State for Civil Aviation, G M Siddeswara informed the Lok Sabha in the middle of July that the Airports Authority of India (AAI) had leased out land measuring 3685 sqm to Gujarat Agro Industries Corporation Ltd. (GAICL) for a period of seven years from May 15, 2009 to May 14, 2016 for setting up a Centre for Perishable Cargo at Ahmedabad Airport. AAI has issued a ‘No Objection Certificate’ to GAICL with various terms and conditions to enable them to engage an agency for operation and management of the existing Centre for Perishable Cargo. The land was leased out by the AAI at just `1 under the Rashtriya Kisan Vikas Yojana (RKVY). The cargo centre will now start functioning three years after it was built at a cost

of `5 crore. In the initial phase, the centre will be able to handle 30 tonnes of cargo and later the capacity will be enhanced depending on the demand. The centre consists of four storage chambers where goods can be stored at temperatures ranging from 15 to 22 degrees centigrade. Apart from the

four chambers and eight trollies, two hydraulic Unit Load Device (ULD) stations have also been set up. After the procedures have been worked out, farmers and agricultural exporters will be able to carry out transactions with foreign clients.

it started functioning. However, without the direct flights, the perishables have been going to Delhi for the onward journey abroad.

Vegetable exporters have stopped sending their consignments on the time-consuming journey of eight hours to Delhi.

According to the Council for Value Added Horticulture (CVAH), that has been operating the present cargo centre, exports had dwindled to a handful a month. Built on a paltry 6,500 sq mt, it has a capacity to handle 80 tonnes of perishables every day – but all manually. The cargo centre with its six temperature controlled chambers, two X-ray machines and six employees is under-utilised for want of direct international flights. Also, any consignment takes a minimum of three to four hours for the paperwork and scanning to be completed. Once that is done, the consignments are sent to the temperature-controlled storages. The long, drawn-out process has often resulted in whole consignments getting spoilt.

The permanent cargo complex will

bring about a sea change in the export of perishables. First, it will be able to handle 200 tonnes a day. In addition, the manual system will be disbanded and a digital system with bar codes for the cargo boxes will be in place.

The new terminal will be utilized to its capacity only when direct international flights start. That could well take a while.

Amritsar Airport is witness to a saga of discontinued flights. Jet Airways started Amritsar-London-Toronto flights but it was stopped – apparently due to the global recession. Its place was taken by Air India with its Amritsar-Birmingham flights that, incidentally, was very popular. In fact, many in Air India termed the flight as the most successful in the history of the airline. Later, that too was stopped. Then, British Midland International (BMI) introduced a thrice-aweek London-Almaty-Amritsar service in October 2011. The flights were stopped after nearly a year of operations in October 2012.

Quite some time ago, a number of

non-resident Indians (NRIs) – a number of them settled in the US and Canada – held a meet to impress upon the Punjab government to realize the potential of the Amritsar Airport. The meet held under the auspices of the Amritsar Vikas Manch (loosely translated it is the Amritsar Development Association), the participants pointed out that the airport’s strategic location should have been cashed upon. Nearly three million people from the districts surrounding the airport were in Great Britain, Canada and the United States. Amritsar was capable of generating 300 passengers for the cities of Birmingham, Toronto, Vancouver and London. But no India-based carrier had started services.

The Manch even forwarded an idea: station six planes in Amritsar (for a flight each to London and Birmingham and two each for Toronto and Vancouver) and the airport would be able to earn a profit. These direct flights would also carry cargo – vegetables, fruits and other eatables – in addition to full complements of passengers.

July 2014

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Cargo & Logistics achievement

UTi LOVES ITS EMPLOYEES

UTi Worldwide, India is one of the country’s chosen few Best Companies To Work For in 2014. It is a rare honour earned after years of pursuing processes that start and end with the employees. TIRTHANKAR GHOSH found out what makes UTi Worldwide, India carry on its love affair with its employees

W

hen UTi Worldwide, India was recently recognised as a 2014 Top 50 Best Companies To Work For by the Great Place to Work Institute, it created history of sorts. Possibly one of the handful of freight forwarders from the country to be given this honour, UTi Worldwide, India division has set benchmarks that are truly exemplary. Among the 49 others it shares the distinction with Google, SAP, Cisco, Vodafone, Marriott Hotels and Hyatt Hotels.

A creditable feat no doubt. Sameer Khatri, Regional Vice President, Indian Subcontinent and Managing Director, India put it rather succinctly: “I am elated that we made it to the Top 50 Best Companies To Work for in India in 2014 especially when 600-plus other companies from a crosssection of industries participated in this study.”

A freight forwarder after all remains a freight forwarder. UTi Worldwide, India has certainly being doing things differently that gave it the rank of 44 in the study.

The citation says it all: “For inspiring trust among your people, for instilling pride in them, for creating an environment within the workplace that promotes camaraderie and for many other reasons that make your organisation one of India’s Best Companies

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July 2014

“We are an organisation that is extremely employee-friendly.That simply means that UTi gives enough mileage and enough width to our employees to paint the canvas as they want in the function that they are in.

Sameer Khatri Regional Vice President, Indian Subcontinent and Managing Director, India

To Work For.” Based on methodology followed for more than 25 years in over 50 countries, the Great Place to Work Institute carries out stringent audit processes in the course of its survey that measures trust, pride and camaraderie among employees.

“When we enrolled in the Great Place to Work Study 2014, our objective was to assess our organisation’s current status and look at what we do well and what we can do better,” remarked Khatri.

That UTi places immense trust in its employees – 1150 employees in more than 25 locations in the country – was evident when Ditlev Blicher, UTi President, AsiaPacific region commented: “Our employees are one of our most important asset and the fact that they acknowledged the positive work environment in our Indian organisation is a remarkable achievement for our management team in India”. The words were more than a confirmation of what Rohit Hasteer, Director, People Management & Human Resources, Indian Subcontinent pointed out. He said that over the last two years, UTi India had undergone “a major transformation when it comes to People Practices”. Acknowledging that the honour emphasised that “all our efforts have gone in the right direction”, there is, according to Hasteer, now a spirit of confidence in the workforce to go to greater heights in the future.

The model that UTi follows is 3C:

achievement PROVIDING THE VISION: The UTi Operating Board (left-right) Adarsh Mundhra (Director - Finance/Commercial ISC), Rohit Hasteer (Director-People Management & HR, ISC), Yuvraj Sharma (Director-Area Sales, ISC), Sameer Khatri (Regional VP-ISC & MD – India), Ravinder Katyal (Director-Air Freight), Sunil K Vaswani (Director-Client Solutions, Projects & Ocean Freight, India) and Hari Sivaprakasam (Director Contract Logistics & Distribution, India)

Best Companies to Work for 2014 India Care, Connect and Communicate. Human Resources, therefore, is not just a support function, but a business arm with an approach to foster growth of the business and growth of its people. Being in the service industry, UTi appreciates the fact that people are the biggest asset internally and externally and so the involvement of people in all aspects of the business is paramount.

Khatri outlined Hasteer’s People Practices: “We are an organisation that is extremely employee-friendly,” he said.

That simply meant that UTi “gives enough mileage and enough width to our employees to paint the canvas as they want in the function that they are in. We let their creative juices to flow, give them the freedom to take decisions or the freedom to put their ideas on

UTi India has undergone a major transformation when it comes to People Practices.

All our efforts have gone in the right direction... there is now a spirit of confidence in the workforce to go to greater heights in the future.

Rohit Hasteer Director, People Management & Human Resources - Indian Subcontinent

the table,” said Khatri. As the leader of the management team, he pointed out that his was a receptive management: one that liked

to encourage out-of-the-box thinking. “We like to encourage people to come up and talk about areas that the company can foray into which can give us an edge eventually,” he said.

The employee-centric moves are taken in consultation with the eight-member operating board of which Khatri is also a member. The board’s decisions have paid off. UTi Worldwide India has performed remarkably in a dull and weak market.

In fact, 2013 was a very good year for the India office of the multinational. “We grew our bottomline about 35 per cent over the previous year and our airfreight product grew by about 12.5 per cent when the market grew by about 3 per cent only,” said Khatri.

UTi’s crowning achievement was ocean freight which grew by 68 per cent. As for 2014, the organisation is on track and it is growing over 2013. “So while the market may have been growing at an ‘X’ percentage, we are in most products growing at a higher percentage than the market,” Khatri pointed out that it was the result of the organisation’s focus and strategy and “the efficiency of implementing our action plan”. He was quite candid when he mentioned that the strategy boiled down to the fact that “we are eating into our competitors’ share of the market”.

While the company has created processes that have ensured that its business lines grow parallelly, it has strictly followed fair practices. Khatri gave an example and pointed out that “we deal with co-loaders and we can contact their clients and take away their business. But as a master co-loader we have played the game very fairly. There is no intent and there would never be in the future to try and go past the core load clients who we work with very well and respect”. That’s why UTi takes pride in the fact that its India unit has truly absorbed the mantra of ‘Think global, act local’.

July 2014

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Cargo & Logistics column

The Great Divide Ramesh Kumar

RAMESH KUMAR advocates for collaborative thinking between the seasoned, old school logistics specialist and the foreign returned number-crunching, laptop-wielding youngster with his new fangled ideas.

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Supply chain seniors candidly admit that there is a huge gap between them and their wards, particularly those who had specialised or studied abroad in logistics/ supply chain and got absorbed. On any day, the preference is for the local ITI-trained hand over the foreign-educated because the former has no intellectual baggage and ready to learn and progress.

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July 2014

ogistics and supply chain is gaining a lot of traction. The number of students pursuing this branch at home and abroad is on the rise. More and more educational institutions – right from the prestigious Indian Institutes of Management (IIMs) to the unknown entities in the hinterland – offering L&S keep going up. Sensible ones and those who are unlucky enough to get into IIMs opt for overseas – going all the way to Singapore, Europe or North Americas for ‘propah’ studies. Add to this, those in-the-profession going on a sabbatical for a year or more to finetune and upgrade their ‘awareness’ or ‘mental toolkit’ at excellent study places (IIM-Bengaluru, for instance, offers such a structured residential course to those with a mandatory industry exposure of a certain number of years) to move up the value chain of their career in the L&S sphere with a holistic approach. Yes, it is indeed happy tidings!

Having said that, what transpires on their return to the workplace – the previous organisation or a new set up – is something they don’t bargain for. “It is a nightmare to work in this organisation,” confesses a L&S Manager at a leading automotive logistics service provider. The organisation under the scanner is a reputed industrial house with its own 3PL, but hived off as a separate entity. What’s the problem? “Mindset,” responds the late 20s foreign-educated supply chain honcho. Whose mindset: his own or his boss’s is the next obvious question. On second thoughts, what a silly question even to contemplate? Yes, the subject under discussion is the mindset of boss, senior in hierarchy, thanks to long exposure with or without a foreign degree.

The boss vs subordinate – rather the home-grown senior vs foreign-educated junior

tussle revolves around freedom for the junior to ‘experiment’ with his new learning. It goes without saying that his desire is vetoed with the senior articulating the well-known and now cliched “This is India” argument.

What does “This is India” convey? Simply put, all foreign education is focused on the ground reality of those countries and India has very little to gain from them. Having said that, no two matured economies are also dissimilar in many respects. How a situation in an organisation’s supply chain honchos by Japanese is totally different from the same issue as tackled

by Europeans or Americans. If this is not the case, the Toyota Production System would have not become such a rage outside Japan!

Let me give a concrete example from the logistics and supply chain sphere. A couple of years ago, when TNT took over an Indian company and tried to implant best practices from the matured way things are done overseas, it bombed. Singapore-based Onno Boots of TNT, in a conversation with this writer, had admitted that they had to look for ways to do things in the ‘Indian way’. Jugaad, if you like!

Ajay Singhal, Chairman of Om Logistics, has also gone on record that the East India style of eliminating desi (domestic) logistics companies would be next to impossible in India. Why? “Because these foreigners coming into logistics and supply chain space are conditioned to do business in a systems and process-driven atmosphere. But as we all know, such things don’t work. I am not saying that their procedure is wrong, but unimplementable here,” he averred.

Supply chain seniors candidly admit that there is a huge gap between them and their wards, particularly those who had specialised or studied abroad in logistics/supply chain and got absorbed. “On any day, we would prefer the

IIM CALCUTTA

column

local ITI-trained hand over the foreign-educated because the former has no intellectual baggage and ready to learn and progress. Moreover, they have no hesitation in dirtying their hands and fingers – meaning they don’t mind working at the bottom of the pyramid such as warehouses and production lines that involves lot of interaction with illiterate or less educated colleagues,” points out a Pune-based senior executive at an automotive plant.

Adds another senior executive, based out of Gurgaon, again in the automotive sphere: “In my experience, these young foreign-educated logistics and supply chain professionals believe in number-crunching on laptops with spreadsheets and inanimate objects, not human beings. Ask them to find a solution to mundane issues like transport management – which is a nightmare day in day out – they will have no clue. You cannot find solutions to challenges on your laptop all the time. It needs a holistic approach of combining tech savviness with human interaction.”

One of the foreign-educated young supply chain manager in a MNC counters: “The scenario is different from industry to industry and company to company. In a system-and-process driven MNC supply chain set-up, everything works fine, needling very little human interaction. On the other hand, in an Indian business set-up the reluctance to invest in technology – a prerequisite for long-term growth – compels them to rely more on human interaction. It is also true that there is more room for innovation in an Indian set-up – provided the freedom to experiment is conceded.

In the foreign pedigreed set-up, a lot of learning is already put into practice and comparatively

NEW THINKING, NOVEL IDEAS: A class in progress at IIM, Kolkata – striving to fit into legacy systems

little scope for innovation. Ironically, MNCs that need not innovate provide greater scope for innovation and Indian businesses that badly needs innovation, restrict freedom to innovate.” It is also surmised that seniors dread the thought of them being proved wrong in their managerial practices by the young, foreign-educated supply chain professionals. It ought not to because there needs to be collaborative learning. Seniors are not the repository of all wisdom. While it is true that they have vast experience of handling tricky issues, it is to be remembered we are living in a dynamic world and the old dictum of “you cannot step into the same river twice” is still valid. Change is permanent in this dynamic world. The emergence and importance of product life cycle management is proof enough of that. Youngsters exposed to new thinking ought to be listened to and encouraged. After all, today’s young managers are tomorrow’s potential CEOs. The future lies in their hands. Increased two-way communication and collaborative work culture at every level will be in the interest of the organisation.

(The author is Member, Committee on Supply Chain & Logistics, National Centre for Cold-Chain Development - A Govt of India Organisation Under Ministry of Agriculture.

He is also author of 10,000 KM on Indian Highways, Naked Banana! And an Affair with Indian Highways

Youngsters exposed to new thinking ought to be listened to and encouraged. After all, today’s young managers are tomorrow’s potential CEOs. Increased two-way communication and collaborative work culture at every level will be in the interest of the organisation. Men may come, men may go, but the organisation goes on forever. Comparatively, that is.

July 2014

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Cargo & Logistics profile

Go-getter extraordinary Ashok Gupta, Chairman of IRC India, is one of those rare individuals who is totally focused on delivering quality services to his clients. The three mantras for his success: punctuality, clean business ethics and prompt delivery

Ashok Gupta Chairman of IRC India

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July 2014

HC TIWARI

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irca 2012. When the handset rang, Ashok Gupta looked at the number on the dial and smiled. The caller was no stranger to him. He has been dealing with him for more than a decade. If it was from within India earlier, now it was from overseas, but the caller remaining the same.

Excepting that he no longer worked for the multinational that he represented a decade ago but yet another global giant at present.

Picking up the handset, “Wwassup?” hollered the December-born Gupta, Chairman of `100 crore IRC India, into it. Over the next five minutes, he heard the ‘narration’ and during the entire call duration, the St.Xavier alumni’s smile kept broadening.

Why? Simple, he has smelt a big business opportunity in the offing.

“Done,” he blurted out and permitted the call to die down.

Over the next hour or so Gupta and his team sat together at his spacious Chairman’s office to dissect the challenge on hand over a few cups of hot tea and cookies and hammered out the perfect solution.

Before sunset that day, a detailed email reached his caller from overseas giving the contours of his ‘solution’. Needless to say, he was asked to execute the same as he designed it.

As I sit with him at the same office in Karol Bagh, New Delhi where that design was perfected more than a year ago, he spills the beans with his characteristic modesty and his polished St.Xavier English: “It was not a pure vanilla transport solution but a well thought out 3PL plan.” What is it all about? “Innovative value addition to assist the business growth,” adds he, kindling extra curiosity.

The help seeker is a senior executive working for a global giant in healthcare and Nepal, India’s neighbour, is a key market

for his company. Significantly, logistical nightmare posed the biggest challenge.

Its desire to sell high value MRI and CT Scanners to Nepal market could not be met because the consignment (three truckload for a single unit) has to be treated with helium gas within 12 days after it leaves its overseas manufacturing site via New Delhi and the entire end to end transportation would entail at least 25 days. If the unit is not helium gas-treated within the specified 12 days period, the entire unit would become a ‘piece of scrap’.

By the way, these two gentlemen were no strangers and in fact their business intimacy goes back by a decade when the former was with another global giant in a different vertical which IRC India was servicing. It was a sheer coincidence that Gupta’s innovative logistics solution then again wiped out the worry lines on the forehead of the same caller now. That trust only brought him back to Gupta’s doorstep again.

What’s Gupta’s innovative solution to circumvent the new concerns? “We decided to get the unit from New Delhi’s customs out and moved the same into the Free Trade Warehousing Zone at Khurja, Uttar Pradesh, where we have space. There are no customs hassles because goods warehoused in this set up can be value added and re-exported. We parked the imported units at Khurja, brought in its helium gas experts to get the units treated and pushed it to Kathmandu by road. The entire operation was consummated in 17 days from the overseas manufacturing site to Kathmandu client site,” elaborates a composed Gupta. His message is simple and clear: I am no pure vanilla transporter, but a solution provider.

The client is happy because Gupta’s innovative solution opened up a potential market which was hitherto out of bounds.

profile IRC is happy because it managed to showcase its ‘innovative streak’ to other potential service seekers. Customer delight is something the Gupta clan believes immensely.

Otherwise, how would IRC been in existence for 51 years.

August 15 is a red letter day for the Guptas. They will be in a celebratory mood.

Nothing to do with the Independence Day celebrations of Republic of India. Then what? It also happens to be the 50th Year since IRC India – the business outfit floated by Raghunandan Lal Gupta along with his uncles with the once imperial capital of British Empire viz., Kolkata as the base, came into existence.

Originally from Rajasthan, the Gupta clan moved to Hansi in the erstwhile undivided Punjab under Lala Muraram Gupta and to Hissar subsequently. Trading timber brought from Daltonganj, Bihar, Raghunandan Lal Gupta shifted base to Kolkata in 1958 sensing greater business potential in transportation and warehousing.

“Doing business those days was much more relaxed and clean. Less competition.

Service was the yardstick to gain business and we were never found wanting,” recalls the IRC India honcho. How did Gupta Senior managed to get into the gates and hearts of corporate giants of those days?

“It is an interesting story,” avers Ashok Gupta. During the course of interviewing a prospective candidate for a senior executive position in his company, Gupta Senior heard the candidate passingly mentioning about Stewarts & Lloyds’ need for some logistical assistance through an open bid.

The rest, as they say, is history. Gupta did bid and won the contract and never looked back thus adding to his business kitty through this maiden corporate account.

In a similar, IRC managed to get into Goodyear, another global giant, an account brought in by another executive. Though this executive left within a month, the Goodyear account stayed, “thanks to our good service record”. Sometime later, when a senior executive left Stewarts & Lloyds to join Dunlop – a multinational, no doubt, needless to say that he wanted IRC to handle the Dunlop logistics, given his past experience in dealing with IRC. “Sheer

“Doing business those days was much more relaxed and clean. Less competition. Service was the yardstick to gain business and we were never found wanting,”

reference coupled with good service record helped IRC to keep on adding corporate clients,” recollects the second son of Gupta Senior.

With a 100,000 sq.ft godowns and a clutch of exotic clients such as ITC, ICI, Goodyear, Dunlop, Bata, Metal Box, the young scion of Indian Roadways Corporation (that was the original name under the partnership format) used to land up at five in the morning and work till eight to circumvent 8-11 a.m. entry/exit restrictions on Kolkata roads then. Inventory management those days stipulated three month goods in godowns and one month items in transit due to bad roads and poor communication facilities.

“Mind you, there were hundreds of items to be procured from 183 locations across India and kept ready to be delivered at the factory gates of these giants. Those days, companies used to have at least two months stock in their godowns and one month stock in transit because you simply cannot stop production due to lack of raw materials. And IRC with its huge godowns in the neighbourhood of these factories and prompt delivery rose to the occasion and won over the hearts of clients,” elaborates a proud Gupta. The icing on the cake was that IRC never charged a penny for warehousing and its revenue came from transportation alone. “We were into value addition for the clients and providing 3PL even before this magic phrase came into existence,” adds he.

After exiting the prestigious St.Xavier’s in Kolkata with a degree in Commerce in 1980, he got into the business whole hog.

As part of diversification strategy, the Guptas entered the manufacturing arena with a plant for flexible packaging in Kolkata.

Then in 1985, IRC entered into a joint venture with a South Korean company for the

manufacture of electronic capacitors at Noida, near Delhi and that is when Ashok Gupta shifted base to Delhi to assist his uncle in the expanding transport and warehousing business and also manage the new manufacturing unit. What is the size of fleet?

“Our focus is on business development and client servicing and fleet management is not,” categorically says Gupta. Hence, IRC has a decent fleet strength but most of its transport requirement is met by associates through the ‘attached outsourcing’ route.

Over the years, the company has grown leading to separation of businesses between the family members – with elder brother Anil setting up IRC Limited with Calcutta as base and Ashok with Delhi as his base under IRC India nomenclature. However, father was the Chairman of both companies until recently. Today, he is just a ‘benevolent patriarch’ watching the growth of his two sons’ business empires from the sidelines.

Though transportation is the core business, IRC India has three more new verticals viz., warehousing and 3PL, international freight forwarding and customs clearance/regulatory with an independent head for each vertical.Aaradhya, who will inherit IRC India one time, educated abroad has completed Maruti Suzuki one year Second Generation training programme, July last year and is now full time with the group companies. “Don’t get bogged down by challenges. They are knocking you down today to help (you) gain wisdom,” declares the soft spoken Gupta, a weekend handicap 8 golfer. His target: `250 crore over the next three years. Gupta, a regular golfer, is on several committees of trade bodies lending his vast experience to tackle industry challenges. Driven by a strong desire to build business and discharge social responsibilities, his family runs charitable educational and health activities for the benefit of the urban under-privileged people of Delhi. He is also associated with Literacy India and Sanskrit International.

— Ramesh Kumar (The profile is part of C&L’s spotlight on personalities from the cargo and logistics sector who have contributed immensely to the Indian economy.)

July 2014

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Cargo & Logistics NEWS IN BRIEF

AIR  DECLINE IN EXPORT FROM TIRUCHI AIRPORT Vegetable exports from the Tiruchi airport has been on the decline over May

due to frequent off-loading of cargo by airlines citing technical reasons and load restrictions in passenger aircraft. Perishables constitute nearly 90 per cent of the cargo exports from the airport.

Vegetables, including onions, coconuts, and drumsticks are exported from Tiruchi and neighbouring districts through the airport to Singapore, Kuala Lumpur, Kuwait, Dubai, and Colombo. On an average, 14 tonnes of perishables were exported from Tiruchi airport a day, mostly

by Sri Lankan Airlines, Air Asia, and Tiger Airways. The cargo terminal at the airport handled a record 4,773 tonnes of cargo in 2013-14, registering 63 per cent growth over the previous year, to be ranked first among the non-metro airports managed by the Airports Authority of India (AAI).

DHL TO HELP AIRBUS TO ASSEMBLE A320 DHL Global Forwarding has signed a contract with aircraft manufacturer Airbus to provide transportation of A319, A320 and A321 aircraft components and general cargo from the Airbus production site in Hamburg, Germany, to Airbus’ final assembly line in Mobile, Alabama, USA. DHL will provide a multimodal transport solution with air, ocean and road freight services beginning in 2015. “The ocean and air freight transportation of sensitive

aircraft parts demands special considerations such as safety clearance on ocean freighters, flatness of the ground and limited acceleration forces,” said Volker

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July 2014

Cargolux opts for Telair lightweight ULDs

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argolux is to become the first airline to carry cargo handling systems manufacturer Telair International’s CAEROe advanced lightweight unit load devices (ULDs). The all-cargo airline will be using CAEROe’s cookie sheet pallets, heavy gross weight pallets and fuel-saving containers on its fleet of B747s. The pallets are up to 40 per cent lighter than standard aluminum ULDs but can carry more weight without additional strapping to the aircraft structure, said a company statement. They are also certified for strapping the maximum allowable load against the pallet edge rails by using tiedowns; so fewer ULD positions get blocked during heavyweight transport, thereby providing extra space and, potentially more revenue for the customer, it added.

“The increased capacity, in addition to

the fuel and time savings we gain from using the CAEROe product line, will provide the airline with a unique opportunity to increase mainstream revenue while at the same time save money and reduce carbon emissions,” enthuses Onno Pietersma, Senior Vice-President of Maintenance and Engineering at Cargolux.

CHAPMAN FREEBORN AND SWISS WORLDCARGO DEAL

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HAPMAN Freeborn Airchartering and Swiss WorldCargo announced a new partnership for delivering time-critical shipments. It means that the global aircraft charter specialist is supporting Swiss WorldCargo with all hand-carry requirements through its worldwide office network. Already an acknowledged global leader for care-intensive cargo services, the agreement will allow Swiss WorldCargo to expand its specialised service portfolio and offer solutions for hand-carry courier shipments worldwide. The service will offer Swiss’ clients a premium solution for urgent shipments and the ability to monitor the progress of their cargo at any time by using an online tracking system provided by Chapman Freeborn, say a company statement.

Chapman Freeborn will benefit by working closely with one of the market’s leading airlines which has a network of some 120 destinations in more than 80 countries served by a fleet of 85 aircraft including A319s, A320s, A321s, A330-300s and A340s. The agreement follows the launch of a strategic cooperation between the two companies in July last year.

Carsten Volk, Managing Director of Chapman Freeborn OBC, said: “We’re delighted to sign this OBC agreement with Swiss WorldCargo and we welcome the opportunity to present our services to their worldwide network. Leading suppliers involved in industries like automotive, energy and pharmaceutical rely on us on a daily basis, so working with an airline with such a strong reputation for customer service and

NEWS IN BRIEF

Cathay, Air China inject funds in Air China Cargo

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athay Pacific Airways, Air China and Fine Star agreed to increase the capital of Air China Cargo by 2 billion yuan ($321.6 million). Cathay Pacific owns 49 per cent of Air China Cargo, while Air China owns the remaining 51 per cent. Investment holder Fine Star holds a 24 per cent equity interest in the capital of Air China Cargo.

“The objective of the capital injection

is to provide funds to assist Air China Cargo to adjust its fleet, to reduce its operating costs and to improve the performance of its main cargo business,” Cathay Pacific said in its announcement. “In addition, the capital injection will assist Air China Cargo to develop its cargo charter flight business with China Postal Airlines and to establish a sound and sustainable basis for the development of its overall business.”

Emirates SkyCargo boosts Scandinavian trade lanes

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operational excellence is an ideal fit.” “It is our strategic goal to strengthen and deepen customer relationships in our chosen markets and to offer a more complete solution set, and we’re convinced that in Chapman Freeborn we have found the perfect partner for charter and on board courier services,” said Oliver Evans, Chief Cargo Officer of Swiss International Air Lines.

mirates SkyCargo is set to further strengthen trade lanes between Scandinavia and its worldwide network with the start of operations to Oslo, Norway, from September 2 this year.

Oslo will become Emirates SkyCargo’s third gateway in Scandinavia.

The start of a daily service to Oslo, with a B777-300 ER, will provide a total of 322 tonnes of bellyhold cargo capacity per week and create new trade and business opportunities between Europe’s largest oil producer and markets around Emirates SkyCargo’s worldwide network. With Oslo joining the network and the steady growth in operations since the start of the Copenhagen and Stockholm flights, Emirates SkyCargo now offers an extensive cargo service to and from Scandinavia.

AIR  Oesau, CEO Middle Europe, DHL Global Forwarding.

ETIHAD MAKES CARGO GAINS Etihad Cargo uplifted record cargo tonnage across the globe in April and May, pushing the carrier into the list of top 10 performing global air cargo operators, according to monthly WorldACD carrier rankings. In April this year, Etihad Cargo moved 44,730 tonnes of cargo around the world, 30 per cent more than in the same period last year, the airline said in a statement.

May also saw impressive cargo ton-

nage flown across Etihad Cargo’s network with 48,869 tonnes of freight carried, up 31 per cent on the same month last year and an increase of nine per cent on the previous month. The carrier said the figures reflected its “continued upward momentum” during the first half of the year. Meanwhile, Etihad Cargo announced more freight capacity in Tanzania, Switzerland and the US.

RUSLAN INTERNATIONAL MOVES G280 WINGS Ruslan international – the joint venture company which manages and markets the 17-strong fleet of giant Antonov An124 aircraft belonging to its shareholders Antonov Airlines and Volga Dnepr Airlines – has transported a load of four wing assemblies for the latest Gulfstream business jet. The wings – for the recently-launched Gulfstream G280 super midsize business jet – were flown from the manufacturing plant in Oklahoma to the aircraft assembly plant in Tel Aviv. The charterer was the Tulsa, Oklahoma branch of Kuehne+Nagel. Each crated wing measured 7.14m x 2.24m x 1.14m, and weighed around 8,000 kgs. Their ground transportation required escorts, due to their size.

July 2014

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Cargo & Logistics NEWS IN BRIEF

SHIPPING AND PORTS  VOLUME IN MAJOR PORTS UP 5 PER CENT Major sea ports in India handled 95.87 million tonnes of cargo during April and May 2014 against 91.48 mn tonnes handled during the corresponding period last year, an increase of 4.8 per cent.

Of the 13 major ports, Kandla led the pack with 15.31 million tonnes followed by Paradip at 11.73 million tonnes. However, when compared with the previous year, Kandla Port registered a decline of 0.40 per cent in total volumes due to fall in iron ore, containers and fertilisers. JNPT and Visakhapatnam shared the third and fourth slots with volumes of over 10 million tonnes. Chennai slipped to the sixth position and it was overtaken by Mumbai port. Growth-wise, Mormugao Port posted 24.48 per cent, followed by Mumbai Port 14.35 per cent, Kamarajar Port 13.90 per cent, V O Chidambaranar Port 13.67 per cent and Kolkata Dock System 12.36 per cent. The rest of the ports posted growth in single digits.

The New Mangalore Port and Haldia Dock Complex also registered negative growth, according to the Indian Ports Association. During May and June 2014, Indian ports handled 1.28 million Twenty-foot Equivalent Units (TEUs) of containers against 1.24 million tonnes in the corresponding period last year.

GLOBAL PORT INDUSTRY CONTINUES POSITIVE TREND IN Q1 2014 A report by the Shanghai International Shipping Institute titled, ‘Global Port Development Report’ said that the positive trend seen in the global port industry in the latter half of 2013 continued in the first quarter (Q1) of 2014 when it grew by 7 per cent yearon-year. The report pointed out that ports in the US and Europe continued to get rid of the sluggishness they faced due to the recession and were maintaining the vibrant growth seen

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July 2014

GMB TO DEVELOP PORT AT DAHEJ

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ujarat Maritime Board has entered into a concession agreement with Sterling Port Limited for the development of the Dahej port. The project envisages investment of about `4,060 crore over a period of 10 to 12 years. This is one of the significant achievements of GMB in the recent times. GMB had invited competitive bids for the development of Dahej port in Bharuch district on Build Own Operate Transfer basis. After evaluation of offers from various bidders, Sterling Biotech Limited, a listed Sandesara Group company, was shortlisted for developing the project.

The project has been awarded for a 30 year concession to the company for the development of an all weather direct berthing port for handling dry bulk, liquid bulk and container cargoes at Dahej.

New record in V.O. Chidambaranar Port

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. O. Chidambaranar Port Trust (VOC) here created a new record in handling limestones on June 20. According to a statement from S. Anantha Chandra Bose, Chairman of the Port Trust, 32,938 tonnes of limestones in bulk was unloaded on a single day from the gearless vessel M.V. Jag Aditi at ninth berth using the port’s new harbour mobile cranes thus surpassing the previous record of 25,323 tonnes of limestones in bulk unloaded from the ship M.V. Massalia on December 11, 2012.

The Chairman said that two newly inducted 120 tonne capacity harbour mobile cranes were capable of discharging 40,000 tonnes of bulk cargo per day.

The environmental and CRZ clearance for the project has been received and the construction is under progress. In the first phase, 2 solid cargo terminals, a liquid cargo terminal and a container terminal would be commissioned at the cost of about `2,500 crore. The total port capacity of Phase I and Phase II would be 41 million tonne per annum.

Adani Ports to comm Tekra dry bulk term

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dani Ports & SEZ Limited will commission its dry bulk cargo handling terminal at Tuna Tekra in record time by December 2014. The Group shared this development with prospective clients during a trade meet.

An Adani spokesman said that “Adani Group has always believed in the idea of nation-building through creation of world class infrastructure. It gives me immense pleasure to announce that our dry bulk terminal at Tuna Tekra will be commissioned by December 2014. It will be a game-changer for exim trade of the North West hinterland, on account of its strategic location, infrastructural prowess and operational efficiency. The response to today’s event only echoes our belief in the potential of this dry bulk terminal to benefit the states of Gujarat, Rajasthan, Haryana, Pun-

NEWS IN BRIEF

India wants to expedite Chabahar port development in Iran

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nion government has decided to speed up construction of the strategically critical Chabahar port in Iran.

Once developed, the port would give India easier access to Afghanistan and Central Asia via a shorter route. Further, India can avoid dealing with Pakistan in this regard.

The External Affairs Ministry has reportedly circulated a fresh Cabinet

commission Tuna terminal jab and Madhya Pradesh, amongst others.”

Adani Ports won the right to develop a dry bulk terminal with cargo handling capacity of 14.112 million tonnes per annum at Tuna Tekra, Kandla Port in February 2012 under a concession agreement with Kandla Port Trust.

note on the project. The port is expected to play a vital role in the reconstruction and development of the Afghan economy.

A total of `550 crore is likely to be invested in the project, which will be implemented by a special purpose vehicle formed by two Major Ports and a private player. While India and Iran had finalised the project in 2003, the venture failed to launch because of US sanctions on Iran.

PPT mulling hybrid cargo terminals

P

aradip Port Trust (PPT) is considering developing hybrid cargo terminals, which would give more flexibility to the terminal operators. The Port may allow private parties to undertake the projects. According to S. S. Mishra, Chairman of PPT, investors could fix the ratio of captive and third-party cargo at 60:40 or 70:30, provided there was minimum guaranteed throughput. Developing hybrid terminals, as part of its expansion plan, would be one of the many new ideas being worked out by the Port to attract private investments, Mishra stressed.

The project, however, has to be given the go-ahead by the Ministry of Shipping.

Paradip Port, with an impressive installed capacity of 108.5 million tonnes (mt), had registered a record throughput of 68 mt in 2013-14, up by a significant 20.25 per cent over the previous fiscal.

SHIPPING AND PORTS  in the final two quarters of 2013 due to a synergy of port investment and consumer consumption.

Though the progress in Q1 2014 had not been as dramatic as last year’s Q3 and Q4, there was a marked quarter-on-quarter improvement compared to Q1 2013, the report said. Key ports such as Los Angeles, Rotterdam, Antwerp and Guangzhou expanded which led to global container throughput growth and drove the industry forward. However, though large ports flourished in the existing economic and industrial climate, small-to medium-sized ports saw slower growth when compared to Q1 2013, the report noted.

DHAMRA PORT WILL BE ‘MUNDRA’ OF THE EAST In the next six years, Dhamra port will become the new Mundra of the East coast, said a senior official of the Ahmedabad-based Adani Port and

Special Economic Zone (APSEZ), an Adani Group company that completed the acquisition of the `5500 crore port in Odisha, recently.

“Our experience in the port sector has been good across India. We just acquired Dharma port on the east coast.

It is all set to become the Mundra of the East in the next 5-6 years, handling about 100 MTPA (million tonnes per annum),” said B Ravi, Chief Financial Officer of APSEZ while speaking at an international seminar organised at the Adani Institute of Infrastructure Management (AIIM). Ravi was referring to the Mundra port in Kutch district that clocked about 100 MPTA of cargo in March this year.

July 2014

35

Cargo & Logistics NEWS IN BRIEF

LAND  DHL EXPRESS EXTENDS CHENNAI SORTING CENTRE DHL Express India is consolidating its position as the top player in international and courier delivery service by expanding its network in the country.

The company recently inaugurated a new service centre facility in Sripe-

rumbudur. The 8,000 sq ft centre has a capacity to handle over 100,000 shipments a year. The new centre will add capacity and support DHL’s growth in international time-definite delivery volumes to and from Sriperumbudur and surrounding industrial belt, a major auto cluster.

DHL has a network of over 350 fleet vehicles on road, 19 dedicated DHL network flights and 100 commercial flights a week. Customers have access to an international network of 220 countries and territories where DHL has a presence.

TRUCK RENTALS UP 2-3 PER CENT IN JUNE Truck rentals on key trunk routes saw a 2-3 per cent increase in June, with tractor-trailer hire charges witnessing a

sharp 20 per cent jump. Over the last six months, truck rentals have improved by 12-14 per cent, bringing some respite

36

July 2014

CHEP TO TRIAL ENERGYSAVING TRACKING DEVICE

U

LD management specialist CHEP Aerospace Solutions is to begin trialling a new solar-powered energy saving GPS/GSM tracking device, allowing customers to follow the movement of their shipments. Installed on each ULD, it is connected to a solar panel and a customised power converter that harvests energy from sunlight and charges the on-board batteries.

CHEP developed its new tracking solution in exclusive partnership with OnAsset Intelligence Inc., the market leader in air cargo tracking solutions. The solution incorporates OnAsset’s Sentry FlightSafe real-time data collection and GPS tracking technology – the only tracking solution approved by the Federal Aviation Administration for use on board aircraft during flight. The tracking device installed on each ULD is connected

RAILWAYS FREIGHT REVENUE INCREASES

T

he Indian Railways reported an increase of 7.05 per cent in revenues at `16,405.26 crore from ferrying 180.63 million tonnes of different commodities during April-May 2014. The railways had carried 171.84 million tonnes freight generating revenues of `15,324.25 crore during the corresponding period last year.

According to the railways, it earned `8,334.09 crore from commodity-wise freight traffic during the month of May 2014.

to a solar panel and a customised power converter that harvests energy from sunlight and charges the on-board batteries. Through its upcoming field trial, which will involve 50 ULDs on board a range of aircraft, CHEP will test and validate the energy-harvesting component of the solution, and in parallel, will conduct impact testing at its Orlando-based Innovation Centre to prove the solution’s overall robustness.

DHL ADDS TO THERMONET NETWORK

D

HL Global Forwarding has expanded its service portfolio for the Life Sciences and Healthcare industry in 13 locations in the Americas, an addition to the company’s Thermonet network of Certified Life Sciences Stations across the world.

The new Americas Thermonet locations include Buenos Aires, Argentina; Santiago, Chile; Bogota, Colombia; Toronto, Canada; Rio de Janeiro and Sao Paulo, Brazil; Mexico City, Mexico; Panama City, Panama; San Juan, Puerto Rico; Caracas and Valencia, Venezuela; and Boston and New York in the US. These facilities offer 35° to 46° F cold storage space to serve DHL’s global customer base in the Life Sciences & Healthcare sector to meet temperature-controlled air freight shipment requirements.

NEWS IN BRIEF

DAMCO UNVEILS FIRST WAREHOUSE IN MYANMAR

T

hird party logistics provider Damco has started operations at its first warehouse and container freight station (CFS) in Myanmar, a 4,000-sq-mt facility that is C-TPAT compliant and near Yangon’s ports and industry. The company said in a statement, that the CFS will serve import/ export activities for fast moving consumer goods, consumer electronics, apparels,

components, machinery and project cargo.

Managing Director of the Thailand, Malaysia and Myanmar cluster, Kiattichai Pitpreecha said that “after acquiring an operating license in 2013 and opening a new office in Yangon, we strengthened our position in Myanmar. This state-ofthe-art, international standard CFS facility enables us to provide superior service to our customers through direct control and management of the entire operation and service delivery process.” Since international sanctions were lifted in 2012, Myanmar has established itself as a frontier market with potential to become a major export manufacturing country and its own consumer market.

DB SCHENKER EXPANDS AFRICAN NETWORK

D

LifeConEx, a part of DHL Global Forwarding CEO David Bang said that the expansion of the Thermonet certified facilities means consignors and consignees have access across the Americas to a reliable end-to-end cold chain. “These DHL Global Forwarding facilities include highly trained personnel capable of handling any type of temperature sensitive pharmaceutical or biomedical items.”

Earlier, DHL Global Forwarding added eight locations in the US - Atlanta, Chicago, Cincinnati, Los Angeles, Miami, Philadelphia, San Francisco and Washington, DC, to its list of US Thermonet facilities

B Schenker is expanding its presence in Africa, by fully integrating Bochimar Lda Luanda (Angola) into its network, following a nine-year regional partnership. The global logistics company has also opened an office in Maputo, Mozambique.

“In line with our growth strategy, we continue to intensify our own presence in interesting markets,” says Dr Thomas Lieb, Chairman of Schenker’s management board. “We are convinced that future growth in the global economy will also come from Africa.” In 2005, the company’s Portugal arm was nominated as the organisation responsible for all shipments to and from Angola, reveals a company statement. Last year Schenker and Bochimar handled more than 3,400 containers of ocean freight and more than 1,100 tonnes of air cargo.

LAND  to fleet operators hit by muted manufacturing activity. According to the Indian Foundation of Transport Research & Training’s (IFTRT) latest monthly alert, truck rentals firmed up during the month as cargo offerings from summer fruit and vegetables (including onion) continued to be buoyant. Additionally, demand for trucks in states seeing wheat procurement gave a boost to freight movement.

“Various contractual transport businesses in the infrastructure sector have hastened their transportation requirements at project sites, which require 35-49 tonnes capacity trailers. In addition, the shrinking truck fleet on national permit routes helped improve truck rentals as well,” said S P Singh, Convener, IFTRT

TNT EXPRESS WINS CONTRACT FROM LUFTHANSA TNT Express has been awarded a contract from Lufthansa Bombardier Aviation Services (LBAS) to transport mission-critical aircraft parts in Germany.

As part of the deal, TNT Express collects the parts from Bombardier’s warehouse in Groß-Gerau, Germany to LBAS’ aircraft maintenance engineers and mechanics in Berlin Schoenefeld Airport.

The consistent and timely delivery of aircraft spare parts to them is critical to prevent the occurrence of costly “Aircraft on Ground” (AOG) situations, a term in aviation maintenance indicating that a problem is serious enough to prevent an aircraft from flying.

July 2014

37

Cargo & Logistics NEWS IN BRIEF

INFRASTRUCTURE  PARADIP, DHAMRA TO JOINTLY ENCOURAGE NW-5 Paradip and Dhamra ports plan to sign a memorandum of understanding (MoU) to develop the Jokadia-Paradip and Dhamra stretch of the Kharsua River for

ACCD HOLDS FIRST EVENT OF 2014

A

ir Cargo Club Delhi organized the first luncheon event of this calendar year recently. The event was attended by 120 members of the club and some eminent guests. Guest speaker Madhav Kulshreshtha enlightened all members and stakeholders with the knowledge of IT and its scope in Air Cargo today and the future.

There was also wide interaction among the members and stakeholders as it laid the foundation towards a greener environment of supply chain and logistics. The convener of the event Ashwini Sharma started the event and the ACCD’s Secretary Sajan

Kallra then took the event further. ACCD’s President Yashpal Sharma proposed the vote of thanks. The session was followed by an enjoyable networking session over lunch.

inland trade. The 201 km stretch is part of the National Waterway (NW)-5, which starts at the Talcher River, having Kharsua and Brahmani rivers as part of it. The plan is to expand the entire waterway in the long term though only a part of the project is currently being taken up.

As per the agreement, the state government will provide the required land to make the river water navigable for ships and for construction of terminals.

‘POTENTIAL IN INDIA IS VERY HIGH’ Jim Berlin, MD Logistics+, on the core business and future plans When did you enter the Indian market and what has been your experience?

We started business with GE to support the locomotive business.

Logistics+ first came to India in 1998 at Bengaluru. My first visit here was with Jack Welch. We ended up with five offices all over India at that time. This entity in India was sold in 2010 to NTL (a Japanese company). At that time, the whole Logistics+ company worldwide was worth $40 million. After three years of keeping away, owing to non-compete clause we have now returned starting at Delhi. Soon we plan to expand to Bengaluru, Chennai, Mumbai and other places.

Today, Logistics+ Worldwide is worth $100

38

July 2014

million, being present in 19 countries with corporate headquarters in Pennsylvania. Our core business is heavy industry and energy with a lot of Project Cargo involved.

What is the kind of tie up you have with SGE Logistics?

We have known and worked with Sundreysh of SGE for over 10 years and he knows the Indian market and we know the international market which makes for a good combo. This is a partnership JV with a local entity and is exclusive in nature.

What are your future plans in India?

We were looking at who would grow faster:

China or India. In the short time China has grown faster but in the long terms India will make up, we feel. India is second global office and the potential here is very high for the future. We will also be covering B&C cities as the competition is lower there.

Any specific achievements, you wish to highlight.

We have to our credit the largest single solar insulation in the world in Calexico in California which was managed by Logistics+ with total transportation solutions which is our niche (from shipment to warehousing to forwarding to trucking).

Where do you see the next opportunity for your business?

There are no grandiose plans. We visualise an opportunity and we just grab it. May be the Middle East will be our new thrust area.

Interviewed by Vinod Kaul

NEWS IN BRIEF

Awards  ETIHAD CARGO WINS CUSTOMER CARE AWARD Etihad Cargo, the freight division of the UAE flag carrier Etihad Airways, has been awarded the Air Cargo Industry Customer Care Award at the 2014 Air Cargo Week (ACW) World Air Cargo Awards.

The award, voted by Etihad Cargo customers, was presented recently to David Kerr, Etihad Airways VP cargo, at ACW’s annual cargo industry awards ceremony held in Shanghai, China. Etihad Cargo was lauded for having a defined and measurable customer care policy.

(L-R) ACW Awards master of ceremonies Steve Weathers, Etihad Airways VP Cargo David Kerr, Geodis Wilson’s global product director air Hank Venema

SCHIPHOL VOTED ‘BEST AIRPORT EUROPE’ Amsterdam Airport Schiphol has won Best Airport Europe prize at the Asian Freight & Supply Chain Awards (AFSCA) for the eighteenth time. The AFSCA awards honour winning organisations for their leadership, service quality, innovation, customer relationship management and reliability.

The awards cover 39 categories, and all voting is independently audited. The Best Airport Europe award was based on Schiphol’s infrastructure, competitiveness, ongoing investment and range of cargo support services and facilities offered.

DHL SUPPLY CHAIN’S MD FOR MALAYSIA DHL announced the appointment of Prakash Rochlani as Managing Director of DHL Supply Chain Malaysia. Rochlani will report to Oscar de Bok, CEO Asia Pacific, DHL Supply Chain.

DHL Supply Chain Malaysia currently employs over 1,500 people over 25 locations nationally. In his new role, Rochlani has overall responsibility for delivering worldclass logistics operations to the broad portfolio of existing customers in Malaysia and generating sustainable business growth. His main focus will be delivering service excellence whilst maintaining a strong pipeline of local talent and operational capabilities.

JEWEL OF INDIA FOR BHARAT THAKKAR Representative of Schiphol Airport receiving the Best Airport Europe prize

CHANGI AIRPORT IS BEST IN ASIA Changi Airport won the title of Best Airport in Asia at the Asian Freight and Supply Chain Awards for the 28th consecutive year. This year, airport operator Changi Airport Group (CAG), has undertaken measures to help the air cargo sector, which is grappling with a challenging operating environment on the back of softer demand for manufacturing in China and declining exports in Asian markets. In January, CAG extended its cargo incentive scheme to March next year, providing a 50 per cent landing fee rebate to all scheduled freighter flights and up to 20 per cent in rental rebates for cargo tenants leasing CAG cargo facilities at Changi Airfreight Centre.

Appointments 

Bharat J Thakkar, Immediate Past President of ACCAI and Joint Managing Director of Zeus Air Services was honoured with the Jewel of India Award and Vijay Rattan Gold Medal with respective Certificates of Excellence for outstanding achievements in his chosen field of activity at the seminar and award presentation organized by the Indian Solidarity Council (ISC) and International Institute of Education & Management (IIEM), in New Delhi.

An airside view of Singapore Changi Airport

July 2014

39

Cargo & Logistics product

THINKING THE UNTHINKABLE Rolls-Royce creates a stir by announcing that it is working on drone cargo ships

R

olls-Royce (RR) has started designing unmanned cargo ships, Bloomberg reported recently. The report goes on to state that Rolls-Royce’s Blue Ocean development team has set up a virtual-reality prototype at its office in Alesund, Norway, that simulates 360-degree views from a vessel’s bridge. Eventually, the London-based manufacturer of engines and turbines says, captains on dry land will use similar control centres to command hundreds of crewless ships.

Drone ships would be safer, cheaper and less polluting for the $375 billion shipping industry that carries 90 per cent of world trade, Rolls-Royce says. They might be deployed in regions such as the Baltic Sea within a decade, while regulatory hurdles and industry and union skepticism about cost and safety will slow global adoption, said Oskar Levander, VP – Innovation, Engineering and Technology.

The news agency also reported that the European Union was funding a 3.5 million-euro ($4.8 million) study called the Maritime Unmanned Navigation through Intelligence in Networks project. The researchers were preparing the prototype for simulated sea trials to assess the costs and benefits, which would finish next year.

Even so, maritime companies, insurers,

40 40

July 2014 May 2014

engineers, labour unions and regulators doubt unmanned ships could be safe and cost-effective any time soon, according to Bloomberg. R-R’s website shows vessels loaded with containers from front to back, without the bridge structure where the crew lives. By replacing the bridge — along with the other systems that support the crew, such as electricity, air conditioning, water and sewage — with more cargo, ships can cut costs and boost revenue, Levander said. The ships would be 5 per cent lighter before loading cargo and would burn 12 per cent to 15 per cent less fuel, Levander told Bloomberg.

Unmanned ships are currently illegal under international conventions that set minimum crew requirements, according to a spokesman for the London-based International Chamber of Shipping, an industry association representing more than 80 per cent of the global fleet. Though the International Transport Workers’ Federation, the union representing about 600,000 of the world’s more than a million seafarers, has opposed the drone ships, according to Bloomberg, Levander of Rolls-Royce said the change will take place slowly as the use of computers in navigation and operations increase. Container ships and dry-bulk carriers will probably be the first to forgo crews, he said. Tankers hauling hazardous

materials such as oil and liquefied natural gas will probably remain manned longer because of the perception that having people on board is safer, he said. Ship efficiency will be the principal driver for the future as it will directly impact operating costs.

There are many ways to improve it – change the vessel’s design to do its job more effectively, improve the hullform and systems to reduce fuel burn, and by optimising the transport chain of which the vessel is a part.

All these factors must be evaluated together, avoiding silos of thinking to get the best results. A growing number of vessels are already equipped with cameras that can see at night and through fog and snow, and have systems to transmit large volumes of data. Given that the technology is in place, it is now the time to move some operations ashore? Is it better to have a crew of 20 sailing in a gale in the North Sea, or say five in a control room on shore?

Shipping’s approach is usually about complying to regulations in the most cost efficient way while addressing the key cost issues of fuel, finance, cargo handling and crew. They can all be influenced by holistic ship design. In the future, we must not think of a ship as a number of separate processes or systems, but as a whole where all aspects affect the other. Only by thinking the unthinkable can the costs be affected.

stats

TRAFFIC TRAFFICHANDLED HANDLEDAT ATMAJOR MAJORPORTS PORTS (DURING APRIL TO JUNE, 2014* VIS-A-VIS APRIL TO JUNE, 2013)

(*) TENTATIVE

(IN ' 000 TONNES)

PORTS

APRIL TO JUNE

% VARIATION

TRAFFIC

AGAINST PREV.

2014* 2

1 KOLKATA Kolkata Dock System

YEAR TRAFFIC 4

2013 3

3045

2955

3.05

Haldia Dock Complex

6837

7071

TOTAL: KOLKATA

9882

10026

-3.31 -1.44

PARADIP

17318

17001

1.86

VISAKHAPATNAM

15336

14566

5.29

7175

6199

15.74

12837

12833

0.03

V.O. CHIDAMBARANAR

7415

6779

9.38

COCHIN

5508

5274

4.44

NEW MANGALORE

9685

9668

0.18

MORMUGAO

3503

2672

31.10

KAMARAJAR (ENNORE) CHENNAI

MUMBAI

14571

13280

9.72

JNPT

16472

15593

5.64

KANDLA

23358

23285

0.31

143060

137176

4.29

TOTAL:

Source:INDIAN PORTS ASSOCIATION

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Cargo & Logistics STATS

TRAFFIC HANDLED AT MAJOR PORTS INDIAN PORTS ASSOCIATION

TRAFFIC HANDLED AT MAJOR PORTS (DURING(DURING APRIL TO JUNE’2014* VIS-A-VIS APRIL TO JUNE’2013) APRIL TO JUNE'2014* VIS-A-VIS APRIL TO JUNE'2013) (*)

TENTATIVE

PORT

(IN '000 TONNES) TRAFFIC PERIOD

P.O.L.

IRON ORE

FERTILIZER FIN. RAW

COAL CONTAINER THERMAL COKING TONNAGE TEUs

OTHER CARGO

TOTAL

% VAR.AGAINST 2013-14

KOLKATA TRF APRIL-JUNE'2014

130

48

14

26

-

-

1844

118

983

3045

TRF APRIL-JUNE'2013

145

49

4

-

-

105

1792

114

860

2955

TRF APRIL-JUNE'2014

1564

404

46

156

333

1153

401

25

2780

6837

TRF APRIL-JUNE'2013

1440

388

48

76

467

1352

503

29

2797

7071

TRF APRIL-JUNE'2014

1694

452

60

182

333

1153

2245

143

3763

9882

TRF APRIL-JUNE'2013

1585

437

52

76

467

1457

2295

143

3657

10026

TRF APRIL-JUNE'2014

4603

572

51

1163

6789

1836

18

1

2286

17318

TRF APRIL-JUNE'2013

4675

1033

14

828

6843

1589

12

1

2007

17001

TRF APRIL-JUNE'2014

3821

3030

297

169

622

1374

1150

64

4873

15336

TRF APRIL-JUNE'2013

3633

2941

295

189

713

1968

1277

67

3550

14566

KAMARAJAR(ENNORE) TRF APRIL-JUNE'2014

649

-

-

-

5886

141

-

-

499

7175

TRF APRIL-JUNE'2013

428

-

-

-

5302

98

-

-

371

6199

TRF APRIL-JUNE'2014

3275

33

34

58

-

-

7321

379

2116

12837

TRF APRIL-JUNE'2013

3562

-

38

67

-

-

7167

371

1999

12833

V.O.CHIDAMBARANAR TRF APRIL-JUNE'2014

144

-

101

157

2079

-

2628

133

2306

7415

TRF APRIL-JUNE'2013

74

-

119

115

1740

-

2407

121

2324

6779

TRF APRIL-JUNE'2014

3506

-

45

74

48

-

1305

86

530

5508

TRF APRIL-JUNE'2013

3858

-

20

-

-

-

1132

80

264

5274

TRF APRIL-JUNE'2014

5225

762

214

28

744

1848

278

17

586

9685

TRF APRIL-JUNE'2013

5768

326

151

30

1101

1561

185

12

546

9668

TRF APRIL-JUNE'2014

141

228

32

-

247

1717

49

5

1089

3503

TRF APRIL-JUNE'2013

145

-

17

-

-

1982

45

4

483

2672

TRF APRIL-JUNE'2014

8437

-

31

75

1087

-

153

13

4788

14571

TRF APRIL-JUNE'2013

8055

-

48

33

1027

-

113

10

4004

13280

TRF APRIL-JUNE'2014

1179

-

-

-

-

-

14765

1101

528

16472

TRF APRIL-JUNE'2013

1263

-

-

-

-

-

13658

1038

672

15593

TRF APRIL-JUNE'2014 14111

134

667

276

1793

26

-

-

6351

23358

TRF APRIL-JUNE'2013 13746

260

657

324

1737

84

340

22

6137

23285

TRF APRIL-JUNE'2014 46785

5211

1532

2182

19628

8095

29912

1942

29715 143060

TRF APRIL-JUNE'2013 46792

4997

1411

1662

18930

8739

28631

1869

26014 137176

4.28

8.58

31.29

3.69

-7.37

4.47

3.93

14.23

Kolkata Dock System

Haldia Dock Complex TOTAL: KOLKATA

PARADIP

VISAKHAPATNAM

CHENNAI

COCHIN

NEW MANGALORE

MORMUGAO

MUMBAI

J.N.P.T.

KANDLA

ALL PORTS

% Variation from previous year

-0.01

3.05

-3.31

-1.44

1.86

5.29

15.74

0.03

9.38

4.44

0.18

31.10

9.72

5.64

0.31

4.29

4.29

Source:INDIAN PORTS ASSOCIATION

42

July 2014

stats

INTERNATIONAL AIR FREIGHT MOVEMENT AIRPORT

SL. NO.

APRIL 2014

FREIGHT (IN TONNES)

For the month APRIL 2013

% Change

For the period April

2014-15

2013-14

% Change

(A) 18 INTERNATIONAL AIRPORTS 1

CHE NNA I

18427

18349

0.4

18427

18349

0.4

2

KOLKATA

3496

3401

2.8

3496

3401

2.8

3

AHMEDABAD

1443

1347

7.1

1443

1347

7.1

4

GOA

123

155

-20.6

123

155

-20.6

5

TRIVANDRUM

2085

2229

-6.5

2085

2229

-6.5

6

CALICUT

1990

2262

-12.0

1990

2262

-12.0

7

LUCKNOW

120

47

155.3

120

47

155.3

8

GUWAHATI

3

3

0.0

3

3

0.0

9

SRINAGAR

0

0

-

0

0

-

40

17

135.3

40

17

135.3

0

0

-

0

0

-

10

JAIPUR

11

BHUBANESWAR

12

MANGALORE

25

0

-

25

0

-

13

COIMBATORE

76

60

26.7

76

60

26.7

14

AMRITSAR

15

TRICHY

16

20

46

-56.5

20

46

-56.5

420

374

12.3

420

374

12.3

V A RA NA S I

0

0

-

0

0

-

17

PORTBLAIR

0

0

0

0

18

IMPHAL

0 28268

0 28290

-

0 28290

-

-0.1

0 28268

TOTAL

-0.1

(B) 6 JV INTERNATIONAL AIRPORTS 19

DELHI (DIAL)

34623

32241

7.4

34623

32241

7.4

20

MUMBAI (MIAL)

38571

39938

-3.4

38571

39938

-3.4 -3.0

21

BANGALORE (BIAL)

12581

12974

-3.0

12581

12974

22

HYDERABAD (GHIAL)

4449

4355

2.2

4449

4355

2.2

23

COCHIN(CIAL)

4425

3516

25.9

4425

3516

25.9

24

NAGPUR (MIPL)

TOTAL

29

37

-21.6

29

37

-21.6

94678

93061

1.7

94678

93061

1.7

-

0

0

-

0

0

-

(C) 7 CUSTOM AIRPORTS PUNE

0

0

26

25

VISAKHAPATNAM

0

0-

27

PATNA

0

0-

0

0

-

28

CHANDIGARH BAGDOGRA

0

0

-

0

0

-

0 0

0 0

-

0 0

0 0

-

29 30

MADURAI

31

GAYA

0

0

-

0

0

-

TOTAL

0

0

-

0

0

-

(D) 17 DOMESTIC AIRPORTS

0

0

-

0

0

-

(E) OTHER AIRPORTS

0

0-

0

0

-

122946

121351

1.3

GRAND TOTAL (A+B+C+D+E)

122946

121351

1.3

Source: AIRPORTS AUTHORITY OF INDIA

July 2014

43

Cargo & Logistics STATS

DOMESTIC AIR FREIGHT MOVEMENT SL. NO.

AIRPORT

(A) 18 INTERNATIONAL AIRPORTS 1 CHE NNA I 2 KOLKATA 3 AHMEDABAD 4 GOA 5 TRIVANDRUM 6 CALICUT 7 LUCKNOW 8 GUWAHATI 9 SRINAGAR 10 JAIPUR 11 BHUBANESWAR 12 MANGALORE 13 COIMBATORE 14 AMRITSAR 15 TRICHY 16 V A RA NA S I 17 PORTBLAIR 18 IMPHAL TOTAL (B) 6 JV INTERNATIONAL AIRPORTS 19 DELHI (DIAL) 20 MUMBAI (MIAL) 21 BANGALORE (BIAL) 22 HYDERABAD (GHIAL) 23 COCHIN(CIAL) 24 NAGPUR (MIPL) TOTAL (C) 7 CUSTOM AIRPORTS 25 PUNE 26 VISAKHAPATNAM 27 PATNA 28 CHANDIGARH 29 BAGDOGRA 30 MADURAI 31 GAYA TOTAL (D) 15 DOMESTIC AIRPORTS 32 INDORE 33 JAMMU 34 RAIPUR 35 AGARTALA 36 VADODARA 37 RANCHI 38 AURANGABAD 39 UDAIPUR 40 BHOPAL 41 LEH 42 DEHRADUN 43 RAJKOT 44 JODHPUR 45 TIRUPATHI 46 DIBRUGARH (D) 17 DOMESTIC AIRPORTS (E) OTHER AIRPORTS GRAND TOTAL (A+B+C+D+E)

APRIL 2014

For the month APRIL 2013

AIRCRAFT MOVEMENTS(IN NOS.) For the period April % 2014-15 2013-14 Change

% Change

5997 6919 3200 243 126 6 225 644 315 68 441 21 556 18 0 33 240 320 19372

6055 5947 2762 180 93 20 223 522 248 444 279 23 444 8 0 19 201 332 17800

-1.0 16.3 15.9 35.0 35.5 -70.0 0.9 23.4 27.0 -84.7 58.1 -8.7 25.2 125.0 73.7 19.4 -3.6 8.8

5997 6919 3200 243 126 6 225 644 315 68 441 21 556 18 0 33 240 320 19372

6055 5947 2762 180 93 20 223 522 248 444 279 23 444 8 0 19 201 332 17800

-1.0 16.3 15.9 35.0 35.5 -70.0 0.9 23.4 27.0 -84.7 58.1 -8.7 25.2 125.0 73.7 19.4 -3.6 8.8

17313 14910 7643 3086 890 536 44378

14834 13925 6587 2653 741 370 39110

16.7 7.1 16.0 16.3 20.1 44.9 13.5

17313 14910 7643 3086 890 536 44378

14834 13925 6587 2653 741 370 39110

16.7 7.1 16.0 16.3 20.1 44.9 13.5

1787 188 385 416 184 96 0 3056

1420 146 318 232 120 98 0 2334

25.8 28.8 21.1 79.3 53.3 -2.0 30.9

1787 188 385 416 184 96 0 3056

481 129 266 480 202 237 84 0 62 202 0 10 1 0 17 2171 102 69079

423 121 228 536 164 183 55 0 69 133 0 15 2 0 24 1953 120 61317

13.7 6.6 16.7 -10.4 23.2 29.5 52.7 -10.1 51.9 -33.3 -50.0 -29.2 11.2 -15.0 12.7

481 129 266 480 202 237 84 0 62 202 0 10 1 0 17 2171 102 69079

1420 146 318 232 120 98 02334 423 121 228 536 164 183 55 0 69 133 0 15 2 0 24 1953 120 61317

25.8 28.8 21.1 79.3 53.3 -2.0 30.9 13.7 6.6 16.7 -10.4 23.2 29.5 52.7 -10.1 51.9 -33.3 -50.0 -29.2 11.2 -15.0 12.7

Source: AIRPORTS AUTHORITY OF INDIA

44

July 2014

stats

INTERNATIONAL & DOMESTIC AIR FREIGHT MOVEMENT SL. NO.

AIRPORT

(A) 18 INTERNATIONAL AIRPORTS 1 CHE NNA I 2 KOLKATA 3 AHMEDABAD 4 GOA 5 TRIVANDRUM 6 CALICUT 7 LUCKNOW 8 GUWAHATI 9 SRINAGAR 10 JAIPUR 11 BHUBANESWAR 12 MANGALORE 13 COIMBATORE 14 AMRITSAR 15 TRICHY 16 V A RA NA S I 17 PORTBLAIR 18 IMPHAL TOTAL (B) 6 JV INTERNATIONAL AIRPORTS 19 DELHI (DIAL) 20 MUMBAI (MIAL) 21 BANGALORE (BIAL) 22 HYDERABAD (GHIAL) 23 COCHIN(CIAL) 24 NAGPUR (MIPL) TOTAL (C) 7 CUSTOM AIRPORTS 25 P UNE 26 VISAKHAPATNAM 27 PATNA 28 CHANDIGARH 29 B A GD OGR A 30 MADURAI 31 GAYA TOTAL (D) 15 DOMESTIC AIRPORTS 32 INDORE 33 JAMMU 34 RAIPUR 35 AGARTALA 36 V A D OD A R A 37 RA NCHI 38 A U R A N GA B A D 39 U D A IP U R 40 B H OP A L 41 LEH 42 DE HRA DUN 43 R A JK OT 44 JODHPUR 45 TIRUPATHI 46 DIBRUGARH (D) 17 DOMESTIC AIRPORTS (E) OTHER AIRPORTS GRAND TOTAL (A+B+C+D+E)

NOTE:

APRIL 2014

For the month APRIL 2013

AIRCRAFT MOVEMENTS(IN NOS.) For the period April % 2014-15 2013-14 Change

% Change

24424 10415 4643 366 2211 1996 345 647 315 108 441 46 632 38 420 33 240 320 47640

24404 9348 4109 335 2322 2282 270 525 248 461 279 23 504 54 374 19 201 332 46090

0.1 11.4 13.0 9.3 -4.8 -12.5 27.8 23.2 27.0 -76.6 58.1 100.0 25.4 -29.6 12.3 73.7 19.4 -3.6 3.4

24424 10415 4643 366 2211 1996 345 647 315 108 441 46 632 38 420 33 240 320 47640

24404 9348 4109 335 2322 2282 270 525 248 461 279 23 504 54 374 19 201 332 46090

0.1 11.4 13.0 9.3 -4.8 -12.5 27.8 23.2 27.0 -76.6 58.1 100.0 25.4 -29.6 12.3 73.7 19.4 -3.6 3.4

51936 53481 20224 7535 5315 565 139056

47075 53863 19561 7008 4257 407 132171

10.3 -0.7 3.4 7.5 24.9 38.8 5.2

51936 53481 20224 7535 5315 565 139056

47075 53863 19561 7008 4257 407 132171

10.3 -0.7 3.4 7.5 24.9 38.8 5.2

1787 188 385 416 184 96 0 3056

1420 146 318 232 120 98 0 2334

25.8 28.8 21.1 79.3 53.3 -2.0 #DIV/0!

30.9

1787 188 385 416 184 96 0 3056

1420 146 318 232 120 98 0 2334

25.8 28.8 21.1 79.3 53.3 -2.0 #DIV/0!

30.9

481 129 266 480 202 237 84 0 62 202 0 10 1 0 17 2171 102 192025

423 121 228 536 164 183 55 0 69 133 0 15 2 0 24 1953 120 182668

13.7 6.6 16.7 -10.4 23.2 29.5 52.7 #DIV/0!

-10.1 51.9 #DIV/0!

-33.3 -50.0 #DIV/0!

-29.2 11.2 -15.0 5.1

481 129 266 480 202 237 84 0 62 202 0 10 1 0 17 2171 102 192025

423 121 228 536 164 183 55 0 69 133 0 15 2 0 24 1953 120 182668

13.7 6.6 16.7 -10.4 23.2 29.5 52.7 #DIV/0!

-10.1 51.9 #DIV/0!

-33.3 -50.0 #DIV/0!

-29.2 11.2 -15.0 5.1

Biju Patnaik Airport, Bhubaneswar, Odisha and Imphal Airport, Manipur airports declared as International airports vide Notification No.AV.20014/003/98-VB(AAI) dated 14th November, 2013 by Ministry of Civil Aviation, Government of India.

Source: AIRPORTS AUTHORITY OF INDIA

July 2014

45

Cargo & Logistics last page

WORLD IS A FLATTER PLACE, COURTESY CARGO! Renu Bohra, Director, Human Resources at Schenker India is one of those no-nonsense professionals – keen to take initiatives and, of course, learn. Barely four years in the cargo and logistics industry, she is well aware that cargo makes the world go round – and she wants to keep the momentum going Cargo is essentially a male-dominated industry. How did you find yourself in it?

I have been in Human Resource function in the manufacturing and engineering sector for about 17 years prior to joining this industry. The reason I chose Logistics was because it was a new industry, with a promising future. In India, the Logistics industry is still in its nascent stages with lots of challenges and bottlenecks. Over the last few years, there has been a focus on Logistics with good investments coming in, better regulatory practices, mega infrastructure projects and several other initiatives. As our economy becomes more mature, the Logistics sector would also become more sophisticated. The skill gap is high and for a HR professional, there are interesting challenges and growth opportunities.

How many years have you been with the cargo industry and how has the journey been this far?

It is now close to four years in the industry and it has been a learning experience.

How have your colleagues and those reporting to you reacted to you?

It has been a very engaging and mutually rewarding association with all colleagues – be it junior colleagues or senior colleagues.

I found there was a lot to learn from them and there are many areas in business, general management and strategy where I could contribute leading to organisation’s success.

46

July 2014

Do you specialize in any section of the industry?

My specialization is HR and all major areas connected to HR function, be it Performance Management Systems, Rewards and Recognition, Learning & Development, Organisation Development and Internal Communication. We have introduced innovative reward schemes and a few unique employee benefits which have resulted in enhanced employee retention.

What is so exciting about the cargo industry that keeps you attracted to it?

The cargo industry is the backbone of globalization. It plays its own role in

bringing the world closer and making it flatter. Isn’t that thought exciting!

How confident are you about future growth on equal opportunity basis with male colleagues?

Logistics is a service industry and offers all kinds of roles in Sales, Marketing, Operations, Customer Service and Support functions like Finance, HR and IT. In terms of role offering, I would categorically state there is no demarcation as to which role is meant for men or for women.

My experience over the last four years in this industry is that as most of the roles in Logistics industry at middle and senior management level are of knowledge workers’, so the success rate should be 50:50, i.e. equal, irrespective of gender. I am confident more and more women will join this industry in coming years.

What advice would you give youngsters – especially women – to join the industry?

Please come with high functional and domain skills; there is no shortcut to success.

Also have an open mind.

Though the industry is male-dominated, there are quite a few successful women professionals who have succeeded on the basis of high entrepreneurial mindsets, networking and relationship management.

So, please focus on being a long-term player and you will find that the growth path is faster and rewarding than many other sectors.

GAC Logistics Pvt. Ltd. One Company All Solutions • Air Freight • Ocean Freight (FCL/LCL) • Export and Import Consol • Custom Clearance • Project Cargo • Warehousing (Bonded and Normal) • Distribution

Head Office (DELHI) GAC Logistics Pvt. Ltd. B301, Ansal Chamber-I, 3 Bhikaji Cama Place New Delhi - 110 066 Tel: +91 11 26160470/71/72, +91 11 43439999 Fax: 91 11 26160473/26178196 Mob: +91 9711856949 (for Import) +91 9899701132 (for Export) Email: info@gaclogistics.in Website: www.gaclogistics.in

Branches: New Delhi * Mumbai * Bengaluru * Chennai * Hyderabad * Kolkata * Jaipur * Visakapatnam * Coimbatore * Kanpur * Lucknow * Panipat

Multimodal Transportation Logistics

RNI No. DELENG/2011/387546